By focusing on groceries, Amazon is targeting a high-frequency purchase category that directly enhances the value proposition of its Prime membership. For Prime members, same-day grocery delivery is free on orders over $25, while smaller orders incur a $2.99 fee. (Non-Prime customers pay $12.99.) This pricing model undercuts competitors and is a tangible benefit that could strengthen loyalty among Prime members. In the bigger picture, groceries and everyday essentials are a core focus of Amazon’s strategy, representing a rapidly growing segment of its delivery business. Jamil Ghani, worldwide vice president of Amazon Prime, told that 2 billion of the 9 billion items delivered in 2024 were groceries and everyday essentials, a 50% increase over the previous year. This aggressive growth highlights the strategic importance of high-frequency purchases as a key driver for Prime membership. As Ghani said, “Our store is meant to be the everything and everyday store, and [Amazon’s] everyday essentials and grocery strategy is about really bolstering the credential on the ‘everyday’ part of it.” The underlying logic of Amazon’s Prime membership model has a clear precedent in the retail sector. The rationale is simple: Customers are less likely to cancel their subscriptions as membership value increases across multiple life needs. For Amazon, Prime’s expanding suite of lifestyle services represents a modern digital parallel. Besides free or low-cost grocery delivery, these benefits include streaming on Prime Video, free shipping on books and household goods and even discounts for healthcare. The Prime Rx prescription savings program offers Prime members discounts of up to 80% on generic medications and 40% on brand-name medications when paying without insurance. The RxPass subscription also offers unlimited eligible generic medicines for a flat monthly fee. Each of these retailers has used bundled value not simply as a retention tool, but as a driver of habitual use and increased customer lifetime value. This comes on top of outright savings: Amazon Prime members save an average of more than $500 annually on deliveries alone — another compelling reason to stay on Prime. This strategic bundling makes the Prime ecosystem an integral part of a customer’s life, creating a buffer against cancellation. This enables Amazon to reinforce the value of Prime membership while competing with e-commerce platforms such as Shopify, even at the potential cost of a direct sale on Amazon’s own e-commerce platform. According to Ghani, the service’s subscription revenue significantly contributes to the company’s investment pool to fund benefits. The company believes this reinvestment deepens member engagement across the entire ecosystem.