I Went To The Amazon Prime Analyst Day. Here's What I Learned.
Daniel Rausch, Vice President, Alexa and Echo, gave us a demo of the new generative AI-enabled Alexa. It's smarter, more intuitive and more personalized. 'Amazon's strategy is to help shoppers get things done,' Rausch told us. While the old Alexa was mainly about replenishment tasks, Alexa+ can help shoppers explore more – increasingly important for a marketplace selling millions of products.
The first-ever Amazon Prime Analyst Day took place in Seattle in June 2025.
Using the larger Echo Show displays, Rausch asked Alexa to help him find a cowboy hat for a Beyoncé concert. He then built a grocery list by asking for specific products as well as ingredients for a recipe. The fluidity of the conversation, the speed of the results, ease of modifications, and the visual cues made for an impressive experience. I've never been overly optimistic about voice commerce, but I think this could be a gamechanger.
I asked whether Amazon felt their grocery offering was differentiated enough, especially given that competitors have raised their game in recent years. Do shoppers really understand the Amazon value proposition? The answer: price, selection, and convenience is Amazon's USP. I'd argue that in grocery it's difficult to achieve all three, but Amazon believes that it's well positioned to deliver on this.
'Over the past 20 years, grocery shopping has actually gotten more complicated,' said Meredith Bunche, Director, Amazon Grocery. 'Grocers offer so much choice today, and that has created a larger mental load for people who just want to get their groceries.'
In fact, throughout the day, there was a strong emphasis on Amazon's ability to reduce the cognitive load for shoppers, busy families in particular. That's certainly a sweet spot for Amazon and perhaps one of the incentives to start consolidating grocery and non-food orders in same-day fulfilment centres. 'Customers may not realize they can buy a tomato on Amazon for same-day delivery,' said Sarah Mathew, Vice President, Global Delivery Experience.
Perishables is an important category as it drives repeat purchasing, but Amazon's real strength is in everyday essentials. Think diapers, potato chips, pet food, toothpaste. This category grew twice as fast of the rest of the business in Q1, now representing 1 in 3 units sold in the US.
Even though Prime isn't just about delivery perks these days, it's important that Amazon continues to improve on speed. Out of the 26 countries where Prime is available today, Jamil Ghani, Worldwide Vice President of Amazon Prime, mentioned Japan as an example of a fast delivery market, where most of Amazon's selection is available for one-day or same-day delivery, with everyday essentials among the most speed sensitive.
Jamil Ghani, Worldwide Vice President of Amazon Prime
Sarah Mathew noted how, contrary to popular belief, same-day delivery can be incredibly cost-effective. And it certainly powers that flywheel.
'Every time we get faster, we see customers come back more often,' she said.
As with any subscription, retention is critical for Amazon Prime. Ghani noted how over 70,000 members have been with Prime since its initial launch in 2005. That is phenomenal loyalty and reminds me of a quote from Jeff Bezos: 'Our goal with Amazon Prime, make no mistake, is to make sure that if you are not a Prime member, you are being irresponsible.'
This is why Amazon continues to invest in new benefits, particularly those with frequent usage like food delivery apps Grubhub in the US and Deliveroo in the UK. Ghani noted that there is a 'huge increase' in retention for those members who use a second Prime benefit.
It's also why they've raised the annual fee just three times over the past two decades. In fact, when adjusted for inflation, the fee has only increased marginally ($131 versus the actual $139).
Ghani doesn't like to call Prime a loyalty programme, as he told me on my Retail Disrupted podcast. He believes Amazon aspires for much more than a transactional relationship; in fact, Prime has become a utility for many households. 'You pay a little more to get a whole lot more,' Ghani said.
One of things he is most excited about is live sports. 'It punches above its weight in terms of differentiation and longevity. Those members are shopping, not just coming to watch the game and moving on.'
Ghani also noted how Prime is not a breakage model. 'The more a member uses Prime, the happier we are. We don't want to be a gym where we sign people up in January and everyone stops going in February.'
And, finally, he confirmed that Prime is not a loss leader. High velocity events like Prime Day drive customer acquisition. Yes, there is churn but even those customers – the ones who trial Prime but don't go on to become members - are valuable. They are much more likely to continue shopping with Amazon, having had that experience.
Amazon may not be invincible, but it certainly remains one of the most innovative, customer-centric businesses in the world. As Daniel Rausch put it, 'We know how to disrupt ourselves before someone else can.'
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