Amazon (AMZN) Prime is wrapping up a year that expanded its offerings, from entertainment like "The Lord of the Rings: The Rings of Power" and "Thursday Night Football" to offering partnerships with third-parties like mobile food delivery platform Grubhub.
"We are going to continue investing in Prime benefits, offers, and exclusive experiences to ensure that members see disproportionate value and choose Amazon to fulfill their needs and wants," Jamil Ghani, VP of Amazon Prime, told Yahoo Finance Live (video above).
For Big Tech, the holiday season has been looming as we come to the close of what's been an incredibly difficult year. The tech collapse in recent months has seen big names like Meta (META), Microsoft (MSFT), and even Apple (AAPL) get slammed as investors grow increasingly cautiousabout a once seemingly untouchable sector. The tech-centric Nasdaq is down about 28% year-to-date, as of open on Wednesday.
HAGERSTOWN, MD, USA - MAY 5, 2017: Image of an Amazon packages. Amazon is an online company and is the largest retailer in the world. ·Julie Clopper via Getty Images
Amazon is also facing serious headwinds this holiday season, as the company's been tied up in the tech rout caused by high inflation, a hawkish Fed, and the consumer slowdown. Competitors such as Walmart (WMT) and Target (TGT) have been preparing for a soft holiday season, and e-commerce is no longer riding the pandemic high that was spurred on by shelter-in-place orders.
Nevertheless, Ghani said that he's fundamentally optimistic about how Amazon Prime will perform over the holidays, making the case that savings — an increasingly "vital pillar" of Prime membership — are especially important to consumers in tough times. Amazon's also coming off two Prime savings events, Prime Day and Prime Early Access, both held within the last few months.
"Right now, with everything that's going on in the world and in the economy, I think [savings are] more important than they've ever been," Ghani told Yahoo Finance. "The events we had earlier in the year show that our Prime members can look to Prime to save, and I expect that Black Friday and Cyber Monday will be no different. We've got deals for them and for our customers broadly, across the entire store, from Amazon products and devices to top brands."
Amazon has said that July's Prime Day was its "biggest ever," as Prime members globally bought more than 300 million items throughout the event.
Amazon Prime offers savings across a wide array of products and services, from other Amazon-related subscriptions – like Kindle and Audible – to credit cards. Amazon Prime members also have access to "Buy with Prime," a service that allows customers to shop with Prime at third-party online stores.
Coming into this holiday season, Prime has been considering pricing especially carefully, said Ghani.
"We really strategically thought about having deep discounts and notable savings throughout the entire season," he told Yahoo Finance. "We started that with Prime Early Access sale... but it's going to continue the entire season now, with Black Friday coming up in just a couple weeks' time."
Notably, Amazon has gotten hammered in tech's return-to-Earth moment. In its Q3 earnings last month, the company reported misses on revenue and sales for its cloud business, Amazon Web Services, and clocked lower-than-expected projections for Q4. Amazon shares are down nearly 40% year-to-date, as of market open Wednesday.
This week, Amazon also began laying off employees, cuts that are reportedly expected to affect as many as 10,000 workers. Ghani doesn't expect the layoffs to impact Prime, saying that he's focusing on the holiday season.
'Disproportionate value'
When Prime launched in 2005, the offer proposition was simple, but compelling — two-day delivery for $79 a year.
In the last 17 years, Amazon Prime membership has grown very much in parallel with Amazon itself. It's now available in 25 countries, with north of 200 million paying Prime members globally. To attract and keep those members, Prime benefits have also expanded, emphasizing savings on everyday products and services. For example, members using Amazon Prime credit cards can earn rewards, and the company has said that, in 2021, more than 70% of Amazon Pharmacy customers saved on prescriptions using Prime benefits.
"The future will definitely be about bringing more convenience, simplicity and fun to Prime members’ lives," Ghani said. "We’ve continually innovated to make Prime membership even more valuable... Prime's future is bright and it's all about serving more of our members' needs and wants wherever they might occur."
Amazon has also invested substantially in building out the entertainment offerings attached to Prime. For example, the company is paying $1 billion yearly for the streaming rights to "Thursday Night Football" and it's worth saying – that's not just an investment that Amazon is making in itself, it's an investment Amazon is linking inextricably to Prime.
Looking ahead, we'll see more investments in Prime across the board and the membership service will remain at the crux of Amazon's long-term plans, according to Ghani. For now, Prime's even continuing to attract members amid slowing consumer spending, he added.
"We have more going on for our members than ever before," he told Yahoo Finance. "Sign-ups to the membership continue to be strong, and renewals are incredibly strong, because members are getting disproportionate value for their membership."
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks.
