CASE 6.1 Amazon Drives Consumer Behavior A recent study of digital consumers by favorability among top U.S. brand experiences (runners-up include GroupM Next reveals that 17 percent of po McDonald's Happy Meals and Starbucks Rewards). At $99 a year($49 o use digital m for college students), Amazon Prime has soared in popularity and is estimated to have signed on more than 10 million subscribers since le wh edia on their pathway to purchase products are visiting Amazon.com its introduction onlya few years ago. as part of the process. This is true whether Two behavioral factors seem to account for Amazon Primes customers purchase online or in a store, and online retail. First, subscribers know they'll get free shipping, so success and its contribution to Amazon's overall dominance in it includes shoppers from all demographic many eventually stop shopping anywhere else. Second, customers roups. Sometimes they begin their journey at Amazon, sometimes they end there, and in about 6 percent of cases. Amazon is the want to get their money's worth from their fee, so they'll buy from Amazon even when they could shop somewhere else, spending a average of S1,200 at the site each year.That's about twice what non- Prime customers spend. only destination they choose. In behavioral terms, this means Amazon has become ares arch destinati na avellana retail site, a place where many digitally savvy shoppers go to search, compare, price, and analyze before making their buying deci sion. Convenience weighs heavily in their behavior, says GroupM; Amazon lets shoppers bypass crowds and salespeople. QUESTIONS FOR CRITICAL THINKING 1. One observer explained Amazon Prime's success by saying that when something is free, people don't think it is valuable. Do you agree? Why or why not? How else can Amazon leverage its growing popularity as shoppers' research site to generate more sales? 2. Price has always been in Amazon's favor. With its increasingly wide product variety, offering everything from books to house- wares, clothing, and music, consumers' odds of finding just what Sources Brett Molina, 'Amazon Raises Price of Prime they want get better all the time. Digital agency Hawkeye has discov Amazo Membership to 599:U5A Today, accessed May 12, 2014, www.usatoday.com, corporate website,'Join Amazon Student, www.amazon.com, accessed March 18,2014; Laurie Sullivan, Behaviors Drive Purchase Path: Amazon Februry 18, 2014, www.mediapost.com GroupM Next Study lluminates the Always in Mix, Online Media Daily, accessed r reason so many Amazon visitors become customers: n Prime, the program that offers free or upgraded shipping,eb Hawkeye's recent survey shows Amazon Prime in a very com- Experiences,' Researchscope,accessed February 18, 2014, www Role of Digital in the Consumer Journey," Business Wire, accessed February 18,2014, http/finance yahoo.com Karen Flynn Amazon Prime Leads Brand free video streaming, and selected free Kindle titles for an annual fee. com. d luttle, Amazon Prime: Bigger, More Powerful, More Profitable than Anyone fortable e first place for consumer awareness, participation, and Imagined," Time, accessed February 18, 2014, htt