Amazon Burns Through Previous Holiday Records

Amazon on Monday reported a record competition-shattering performance during the Christmas holiday, adding more than 3 million Amazon Prime members last week alone.

Holiday sales of Prime devices more than doubled last year’s record number, the company said.

The Prime Now program, which offers free two-hour delivery in 20-cities across the country, broke records on Christmas Eve.

Prime Video views more than doubled over the holiday, and Amazon streamed a record number of songs through Prime Music.

Fast and Flexible

Amazon is tapping into two growing consumer trends, according to Charles King, principal analyst at Pund-IT.

“The first is the understandable desire for expedited shipping, especially during the holiday crush,” he told the E-Commerce Times, “but by including access to Amazon’s streaming services in Prime, the company is also tapping into the growing demand for flexible access to media and entertainment, particularly among younger consumers.”

The record-setting week included huge increases in sales of Amazon’s content delivery devices, including tablets and set-top boxes Amazon noted. The increased sales of those devices likely contributed to a record number of viewers of Amazon’s exclusive video content, which has been showing enormous growth compared with last season.

Prime members watched a record number of movies on Prime Video in 2015.

Prime Music streamed a record number of songs during the holiday, with worldwide Prime Music plays increasing by 350 percent.

Amazon Prime membership is now in the tens of millions, the company said.

The new Fire tablet, the Amazon Echo and the Fire TV stick were three of the top-five items most ordered on Christmas Eve through Prime Now, which offers the two-hour delivery service.

Amazon’s Fire tablet and the Fire TV stick were the no. 1 and no. 3 items, respectively, of all items sold on Amazon through the holiday season.

Two hundred million more items shipped for free during this holiday season, said Amazon CEO Jeff Bezos. Members doubled their Prime Video viewing hours, compared with a year-ago. The company’s new original series, The Man in the High Castle, led the way, becoming the most-watched TV season ever on Prime Video.

Amazon Is Driving the Bus

It’s likely that Amazon will continue to drive the agenda among the major players in the e-retail space, suggests a report Forrester Research released last month. Its gross merchandise value in the U.S. may surpass US$100 billion in 2015, making it the third largest retailer in the U.S.

Amazon last year reported $88 billion in revenue, with North American sales making up 61 percent of that share, according to the report.

However, the revenue figures are deceptive, Forrester’s report notes, because a significant percentage of the company’s business is tied to third-party marketplace sales.

Savings and the convenience of free shipping drive most consumer decisions on Amazon membership, and the benefit to Apple’s content business comes on the back end of that, observed Tirias Research analyst Kevin Krewell.

“Amazon wants to be a major player in the electronic media ecosystem, along with Apple, Google and Netflix,” he told the E-Commerce Times.

Bundling the music and video services with the Prime membership Amazon for Fire tablet and Amazon Fire TV set top box users just helped the company use brand loyalty to drive demand for its increasingly powerful share of entertainment content.

Mobile Use Rises

Also notable among Amazon’s record-setting sales figures is evidence of the increasing importance of mobile transactions in driving Amazon’s business.

Nearly 70 percent of Amazon customers transacted business through a mobile device over the holiday, the company reported, and shopping via Amazon’s mobile app more than doubled during the holiday.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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