Amazon Delivery

What Are People Buying Through Prime Now?

Years from now, plenty of pundits will claim that Amazon Prime Now was a surefire bet from the start. Why wouldn’t customers want to pay a little extra to get their purchases within one or two hours? That’s how fast the retail world moves, though — and especially with Amazon — success is sometimes evident without being immediately apparent.

Listen close enough, and you can hear the sounds of retail pundits’ necks snapping with whiplash at the newest sales figures from Prime Now. In a note from Cowen & Co. Analyst John Blackledge obtained by MarketWatch, Blackledge explained that around 25 percent of all Prime subscribers made a Prime Now purchase during January. Given a ballpark figure of 40 million Prime subscribers, the Cowen analysis has Amazon’s barely year-old express delivery service pulling in 10 million customers per month as of the start of the new year.

What are 10 million customers buying that they need within the next two hours? Blackledge isolated four specific categories driving sales: media (60 percent of respondents), electronics <$50 (47 percent), personal care products (44 percent) and apparel (41 percent). A further 22 percent made groceries orders through Prime Now.

The fact that media and electronics have proven popular for an express shipping format shouldn’t come as too big of a surprise; with the proliferation of streaming content platforms, the expectations among consumers for these products have modernized as well. However, the fact that 4 million people make monthly purchases of clothes, shoes and accessories through Prime Now might not be as intuitive. Even so, Cowen & Co. made this bold prediction to wrap up its note.

“We expect Amazon to be the number one U.S. apparel retailer by 2017, driven by accelerating purchaser growth, and continue to gain traction in other retail verticals,” Blackledge explained, via MarketWatch.

How is Amazon managing to strike it big with fashion shoppers who normally display a more discerning taste than the catch-all product catalog that Amazon has used to get to where it is today? Internet Retailer has a breakdown of the strides Amazon has made in developing its own line of private-label fashion brands in the hopes of re-injecting the retailer with the credibility of boutique, well-known niche designers. Part of this has to do with a reluctance of established brands to list their highfalutin blouses and dresses, which is why Amazon now holds trademark applications on six of the seven fashion brands on its site, including Lark & Ro, Franklin & Freeman and James & Erin Plus.

The fact that these brands only date to March 2015 and yet generate the sales Cowen is seeing is a minor miracle in its own right. Have consumers really fallen in love with Amazon-owned brands like they do with the displays they see on 5th Avenues around the world? There’s a chance of that, Syama Meagher, owner of Scaling Retail, told Internet Retailer, but is it more likely than customers being pulled to the low prices of near-imitations instead of the brands they’re truly loyal to?

“I feel like some consumers will see a cheap price, but the way consumers are leaning is toward more of a relationship [with brands],” Meagher said. “I think Amazon is trying to service a hole in their market, but they are doing nothing to build those brands in and of themselves.”

If Cowen’s predictions hold true and Amazon usurps the lion’s share of apparel sales in just a year’s time, that might have even bigger implications for the future of the fashion industry. It means that customers will have stopped caring about brand loyalty and will have switched over to price as their determining buying factor.

If they don’t, though, Amazon can ditch shipping designer clothes in an hour and focus on shipping hot meals that its customers can spill on those expensive brands instead.

——————————–

Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 AML/KYC Tracker Report provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

TRENDING RIGHT NOW

To Top