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- Amazon Prime Day is scheduled for July 16 and 17, offering a variety of discounts for Prime members.
- It's also about bringing shoppers deeper into its ecosystem — and not just for Prime memberships.
- Amazon's offers include free months of its music, grocery subscription, and Kindle Unlimited.
Amazon Prime Day is approaching, and as usual, the online retailer is offering a slew of specials for customers during the two-day shopping extravaganza.
But Amazon doesn't just want you to buy discounted electronics or fashionable sneakers. It also wants you to sign up (and pay for) Amazon Prime at $14.99 a month — and possibly a whole host of other Amazon subscriptions.
Already, 75% of US consumers are Prime members, according to data from Consumer Intelligence Research Partners. Amazon is still gunning to get the remaining quarter on board.
Prime Day is "an opportunity to allow non-Prime members to peer over the shoulder of their friends and family, see those deals, and wonder if they should sign up," said Jeremy Bartlow, a partner and consumer expert at PA Consulting.
"They use it as a massive volume booster, but also to start getting more and more scale each year with people who haven't jumped on the Prime bandwagon yet," Bartlow said.
But that's just the gateway drug.
Amazon's deals announced in the lead-up to Prime Day include access for members to three free months of delivery from the company's grocery operations, including Whole Foods and Amazon Fresh, for orders over $35 (the cost a month after the freebies run out is $9.99).
Music fans can also get five months free of Amazon Music Unlimited (another $9.99 a month), three months of Kindle Unlimited ($11.99 a month, plus you need a Kindle e-reader, which retails for a minimum of $99.99), or three free months of Audible Premium Plus (plans start at $7.95 a month).
Amazon is also offering steep discounts to Prime members on its own electronic devices. One version of its Ring video doorbell is on sale for $50, down from $100, while a 40-inch Fire TV is $170 — roughly one-third off its regular price.
The strategy is all about getting customers to try new products in the Amazon world — and hopefully sticking with them by paying additional subscriptions on top of their Prime membership, Bartlow said.
For example, "they sell their tablets so cheaply" to get people into Amazon's ecosystem. Plus, "many of them will have ads and a whole user interface that's optimized to push their digital content, which is very different than buying a tablet from another brand," he said. (The Amazon Fire HD 10 tablet is 46% off this Prime Day, down from $139.99 to $74.99.)
Meantime, Amazon's Alexa-enabled devices and speakers might lead users to subscribe to Music Unlimited.
For Amazon, those kinds of purchases are where the real money is.
"We sell a lot of devices during our Prime Day events," CFO Brian Olsavsky said on an earnings call after Prime Day 2022. "We don't make money on the device. We make money on the use of the device."
Developing a complete offering of devices and services has been the goal of several Big Tech companies for years.
Apple has created an ecosystem primarily thanks to its iPhone, for example, though parts of its strategy prompted an antitrust lawsuit from the US Department of Justice earlier this year. Apple has pushed back against the accusations.
Google and Microsoft are also vying for you to join their networks. All are adding AI features in an attempt to make experiences like shopping online easier.
Other retailers have taken note of Amazon's strategy and joined in with their versions of Prime Day, though they haven't developed their own range of devices.
Walmart, for example, has spent the last few years trying to sign up shoppers for Walmart+, its own paid membership.
And in March, Target launched Target Circle 360, an annual membership that costs $99 and gives customers unlimited same-day deliveries.
For those with a Prime subscription, Prime Day represents "the new Black Friday," Bartlow said. Just make sure to cancel your free trials if you don't enjoy them.
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