The Amazon Ecosystem and Its Rewards (for Amazon)

Last week we looked at the range of ways that Amazon customers can connect with Amazon. We identified six primary Amazon services and devices to understand what we call the Amazon “ecosystem”. We showed that in addition to Amazon Prime membership, many US Amazon customers have several of these Amazon affiliations, though relatively few engage with all or almost all of them.

Though Amazon makes money with these services and devices, Amazon’s primary motivation seems to be building better Amazon shoppers - customers who are more committed to Amazon and more likely to turn to Amazon for more of their shopping needs. With our customer behavior data from recent Amazon shoppers, we can analyze the impact of that ecosystem on Amazon shopping.

We measure how annual spending changes as customers use more of Amazon’s additional services and devices. Not surprisingly, the most affiliated Amazon customers, measured by that number of services and devices, spend the most each year.

The services and devices are:

• Amazon Prime membership

• Streaming Video use

• Credit cardholding

• Subscribe & Save orders

• Echo smart speakers

• Kindle e-Readers and Fire Tablets

Last week we showed almost half of Amazon’s US shoppers use three or more of them, with more than 20% using four or more. Annual spending increases as customers use more of these. Spending ranges from about $500 per year for customers that use only one to $2,200 per year for customers that use all six (Chart 1).