If you know anything about Amazon, you know that the company is investing heavily in its Prime program because Prime members spend more than non-members. A new report suggests customers who own an Amazon Echo “smart speaker” spend even more.
Consumer Intelligence Research Partners, LLC (CIRP) found that Amazon Prime members spend 27% more than average, and Amazon Echo owners spend 66% more than average.
Engagement is clearly an indicator of loyalty – we noted in October that Amazon CFO Brian Olsavsky said Prime members who watch video spend more on Amazon than those who do not.
Breaking down the numbers, CIRP estimates that in the US, the average annual spending at Amazon.com for Amazon Prime members is approximately $1,300; the average annual spending for Amazon Echo owners is approximately $1,700; and overall, all US Amazon customers spend approximately $1,000 annually. (Numbers as of September 30, 2017.)
CRIP cofounder Josh Lowitz said, “Based on the spending patterns of Echo owners, Amazon can certainly subsidize sales its Echo devices.” That sounds like the approach Amazon took with Prime. But Echo is not without rivals, including Google.
CRIP cofounder Mike Levin said, “Of course, it’s early in the game, for the smart speaker market and therefore for this analysis. Still, we base this analysis on the past 12 months of solid customer survey data, and an unmistakable trend has started to emerge, that Amazon creates products and services that seek to promote retail shopping and deeper affiliation at Amazon.com. Amazon probably wants the Echo device family to stand on its own as a consumer electronics line, while supporting the greater mission of succeeding as an online retailer.”
The end game for Amazon appears to be to make it really easy to order from Amazon using its smart speakers, and get as many of its smart speakers into homes as possible.
