Why is Amazon so valuable? Because of its successful membership system

Shelly Banjo, a columnist for Bloomberg Gadfly, believes that Amazon's membership program is an important reason for its growing strength in the retail industry. This program not only attracts more and more market share, but also further stimulates consumer behavior.

Amazon's membership program has been launched for more than ten years. Last year's first Member Day promotion had sales exceeding the traditional "Black Friday", and consumers even complained about insufficient inventory.

According to data from market research firm CIRP, the program has brought 19 million new members to Amazon in the past year. In the second quarter of 2016, 52% of Amazon users in the United States had subscribed to Prime membership. The $99 annual Amazon Prime membership program guarantees members free shipping within the United States for any amount, free 2-business-day delivery, streaming video, photo storage, and Kindle lending library services.

The convenient logistics service provided by the membership program is changing consumers' habits. When daily necessities run out, consumers no longer go to physical stores regularly to purchase, but open Amazon's website with a click of a finger. This is also the reason why Walmart continues to lose market share - Amazon's market value surpassed Walmart a year ago.

The benefits of membership services have prompted them to further expand their consumption. CIRP also found that Prime members spend twice as much on Amazon as non-members - members spend an average of $1,200 per year, while non-members spend only $500.

According to Kantar Retail Consulting, 60% of households’ main purchasing power had shopped at Amazon in the month ending June 16: this proportion is getting closer and closer to Walmart. At the same time, the number of regular customers on Amazon’s website is also increasing.