Prime changes how you shop. I used to put things in my shopping cart, figuring I'd buy them later if I had something else I wanted and could drive the price over $25. Now I just buy it right away if I figure I need it - there's no hassle, no shipping fee, and I know that if it turns out I don't want/need it, it's trivially easy to return it and I won't be charged.
It also means Amazon is the first place I check for just about anything I buy online: over time I've found that it's highly unlikely that the difference in price (esp. with shipping) is going to be enough to cover the potential hassle of ordering somewhere else.
Prime is a huge win for Amazon. They take loyal customers, increase order volume and push the customers into ordering from a wider range of categories. More dollars from those customers end up going to Amazon, and the customers become less price sensitive as well.
It also means Amazon is the first place I check for just about anything I buy online: over time I've found that it's highly unlikely that the difference in price (esp. with shipping) is going to be enough to cover the potential hassle of ordering somewhere else.
Prime is a huge win for Amazon. They take loyal customers, increase order volume and push the customers into ordering from a wider range of categories. More dollars from those customers end up going to Amazon, and the customers become less price sensitive as well.