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Membership Subscriptions – a win win win

Here is a BFO (blinding flash of the obvious)

Amazon Prime and Costco get shoppers to pay up-front fees in exchange for benefits.  The numbers are quite extraordinary. Costco with 72 million members gross $2.3 billion a year in membership fees alone. Before they sell anything!

Google, Instacart, Jet, Sephora, and Thrive Market have each formed members-only program for online shoppers that gives consumers added benefits in exchange for an up-front yearly fee. 

These Membership programs offer retailers a number of advantages, including increased spending.  

About 40% of Prime members spend more than $200 on Amazon over a 90-day period compared to 13% of non-Prime customers.

Free delivery and lower prices are the top benefits ;  74% of US consumers say that free delivery motivates them to shop more online, and 50% say lower prices do.

I suspect that more and more businesses in all types of industries will jump on the membership bandwagon in the coming years.

Posted on May 20, 2015

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