Amazon.com, Inc. (NASDAQ: AMZN) has always been cagey about the magnitude of its Amazon Prime loyalty program. What started as a way for frequent shoppers to obtain free two-day shipping has evolved and offers members a host of benefits, including streaming video and music, free e-books, and other Prime only exclusives.
Even though the company has been tight-lipped about its Prime members, Amazon will occasionally drop hints. In the press release touting the results of its holiday season, the company said that "Prime membership continued to grow this holiday -- in fact, in one week alone, more than four million people started Prime free trials or began paid memberships."
The number of Prime members is about much more than bragging rights, though that may factor into it. The company wants to "sell more shoes," as CEO Jeff Bezos once famously put it -- and it's selling a lot of shoes.
Amazon saw significant sales growth over the holiday season. Image source: Getty Images.
Record sales
Amazon said customers were shopping at "record levels" from "hundreds of millions of products" and that more than 1 billion items had been ordered from small businesses worldwide during the season. The company revealed that "Amazon Devices also had its best holiday yet" selling tens of millions of Alexa-enabled products. The voice-activated items include the Echo family of smart speakers, as well as the Fire Stick, Fire Tablets, and Fire TV products.
The best-sellers of all were the Echo Dot and Fire TV Stick, which were not only the top-selling Amazon products but also "the best-selling products from any manufacturer in any category across all of Amazon," similar to what the company reported immediately following its Black Friday sales event.
Prime real estate
According to Amazon, four million people started Prime free trials or began paid memberships, but we don't know how many there are and how many will stick around. With that disclaimer out of the way, Amazon has a vested interest in increasing the ranks of Prime subscribers. At the third annual Code Conference earlier this year, Bezos called Prime one of the "three pillars" of the company and explained how Prime was key to the company's success:
We get to monetize that content in a very unusual way, because when we win a Golden Globe, it helps us sell more shoes. ... [I]f you look at Prime members, they buy more on Amazon than non-Prime members, and one of the reasons they do that is once they've paid their annual fee, they're looking around to see, "How can I get more value out of the program?"