In behavioral terms, this means Amazon has become a research destination as well as a retail site, a place where many digitally savvy shoppers go to search, compare, price, and analyze before making their buying decision. Convenience weighs heavily in their behavior, says GroupM; Amazon lets shoppers bypass crowds and salespeople.

Price has always been in Amazon’s favor. With its increasingly wide product variety, offering everything from books to housewares, clothing, and music, consumers’ odds of finding just what they want get better all the time. Digital agency Hawkeye has discovered another reason so many Amazon visitors become customers: Amazon Prime, the program that offers free or upgraded shipping, free video streaming, and selected free Kindle titles for an annual fee. 

Hawkeye’s recent survey shows Amazon Prime in a very comfortable first place for consumer awareness, participation, and favorability among top U.S. brand experiences (runners-up include McDonald’s Happy Meals and Starbucks Rewards). At $99 a year ($49 for college students), Amazon Prime has soared in popularity and is estimated to have signed on more than 10 million subscribers since its introduction only a few years ago. 

Two behavioral factors seem to account for Amazon Prime’s success and its contribution to Amazon’s overall dominance in online retail. First, subscribers know they’ll get free shipping, so many eventually stop shopping anywhere else. Second, customers want to get their money’s worth from their fee, so they’ll buy from Amazon even when they could shop somewhere else, spending an average of $1,200 at the site each year. That’s about twice what nonPrime customers spend. 

1. One observer explained Amazon Prime’s success by saying that when something is free, people don’t think it is valuable. Do you agree? Why or why not? 

2. How else can Amazon leverage its growing popularity as a shoppers’ research site to generate more sales?