SAN FRANCISCO – The countdown to Christmas has begun and the latest entry is Amazon’s Black Friday Deals Store, which will parcel out sale items between now and Dec. 22.
The store, which launched Monday, will post sales daily on the Amazon site.
In an effort to further entice customers to become Amazon Prime members, Amazon is offering members a 30 minute head start over non-Prime members to see what it’s calling “lightening deals.” These deals will run at various times over the course of each day, Amazon said.
Prime members will get early access to more than 30,000 lightning deals, said Steve Shure, vice president of Amazon Consumer Marketing.
Prime Members are key to Amazon’s strategy of bringing customers deeper into its ecosystem. They get two-day free delivery, access to multiple other perks and now an early look at sale items.
All of which is well worth it to Amazon.
Currently about 46% of Amazon customers in the United States are Prime members, double what they were two years ago, said Josh Lowitz, co-founder of Consumer Intelligence Research Partners, a Chicago-based research and analysis firm.
Prime customers on average spend about $1,200 per year, double spending by non-Prime customers, so enticing people to fork over the $99 annual fee for the service is a major push for the company.
The Black Friday store seems like something of a repeat of the Prime Day Sale from July, said Forrester Research senior analyst Sucharita Mulpuru-Kodali.
“The big difference this time though is that they will be competing with the rest of the retail industry which always pulls out all the stops at this time too,” she said.
In July, Amazon held a Prime Day Sale offering free Prime membership and 24-hours worth of sale items. Some customers complained the items offered were less-than-thrilling.
Still, Prime Day deals and sales did bring people into the fold.
Amazon added a net 3 million members in the third quarter of 2015, which ran July through September, with Prime Day hitting in July. That compares to one million net new members in the same quarter in 2014, according to Consumer Intelligence Research Partners.
Prime memberships in the third quarter of 2015 grew by 7%.
“Approximately 25% of those new members reported joining to take advantage of Amazon Prime Day,” Levin said.
The key to Amazon’s success at growing faster than other e-commerce sites is the Prime program, said Scot Wingo, executive chairman of e-commerce software firm ChannelAdvisor.
Not only do Prime member spend more than non-Prime members, but “when consumers join Prime, Amazon goes from being one of the sites considered when consumers begin searching for products online to the first site considered,” Wingo said.
Amazon has a fairly large chunk of online commerce market share in the United States.
E-commerce makes up about 7% of retail sales in the U.S., said Jason Moser, an analyst with The Motley Fool.
For 2014, total e-commerce sales were about $305 billion. According to Amazon, its North American retail segment was just slightly above $50 billion.
That gives Amazon somewhere in the neighborhood of 15% of the domestic e-commerce market today, Moser said.
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