Skip to content

Amazon Innovation: How was Amazon Prime developed?

Amazon Innovation strategy

Table Of Contents:

Founded in 1994, Amazon is one of the largest technology companies in the world. Amazon is known for its relentless focus on innovation across various sectors. The company has consistently introduced new technologies, services, and business models to improve customer experience, streamline operations, and enter new markets. 

Amazon’s businesses include e-commerce, cloud computing, digital streaming, and artificial intelligence. There are more than one innovation stories of Amazon.

However, this blog will talk about the most loved one—the Amazon Prime innovation.


How was Amazon Prime developed?


In 2004, a team of Amazon employees led by Greg Greeley, then VP of the company, floated the idea of Prime. Initially, it was intended as a loyalty program to enhance customer retention and encourage repeat purchases on the platform.

Subsequently, as a part of Amazon’s intrapreneurship program, Charlie Ward, an in-house Engineer, submitted an idea to the Amazon digital employee suggestion box. He proposed that for an annual subscription, members may receive free two-day shipping on eligible items.

The company’s CEO encouraged the initiatives and asked a group of employees to come to his boathouse to work on the idea.

Amazon Prime was officially launched on February 2, 2005. And, for an annual fee of $79, subscribers received free two-day shipping on almost 1 million eligible products.

Although it was introduced as a loyalty program to enhance customer retention and encourage repeat purchases on the platform, the Prime innovation shortly became a top niche idea. 

Prime subscription now generates over $19 billion a year, and one in every three Americans has a Prime membership. The ongoing success and evolution of Amazon Prime demonstrate the importance of adapting to customer needs and market trends.


Expansion of Amazon Prime Innovation


Primarily introduced as a loyalty program to incentivize frequent shopping on the platform, Amazon Prime has evolved over the years. It now offers a comprehensive set of features and services like Prime Video, Prime Music, and more. It has become a significant driver of customer loyalty.


Free and Fast Shipping


  • Free Two-Day Shipping: One of the foundational features of Amazon Prime is free two-day shipping on eligible items. It encourages members to shop more frequently on Amazon, as they receive their orders quickly and without additional shipping costs.
  • One-Day and Same-Day Delivery: The loyal members can access one-day or even same-day delivery, further enhancing the order fulfillment speed.



Video Streaming: Amazon Prime Video


  • Streaming Service: Amazon Prime Video is an online video streaming service. It offers a vast library of movies, TV shows, and documentaries. Members get multi-device access to stream content on the device of their choice.
  • Original Content: Amazon Studios invests significantly in producing original series and movies, such as “The Marvelous Mrs. Maisel,” “The Boys,” and “Fleabag,” to attract subscribers with exclusive and high-quality content.


Amazon Prime Music


  • Music Streaming Service: Prime Music provides ad-free music streaming with a library of over two million songs. Also, the loyal members have the option to upgrade to Amazon Music Unlimited for access to a larger music catalog.
  • Amazon Music Unlimited Discount: Prime members receive a discount on the subscription fee for Amazon Music Unlimited, which offers a more extensive selection of music.


Amazon Prime Reading


  • E-books and Magazines: Members can borrow and read e-books, magazines, comics, and more from the Prime Reading catalog at no additional cost. Users can access these materials on Kindle devices or through the Kindle app.
  • Early Access to New Books: The members get early access to new books by popular authors through Amazon First Reads.


Besides these popular categories, Amazon Prime also offers the following services:

  • Amazon Photos: Unlimited Photo Storage
  • Amazon Family: Family-Centric Benefits
  • Amazon Fresh and Whole Foods Discounts: Grocery Delivery
  • Twitch Prime: Gaming Benefits
  • Amazon Prime Wardrobe: Try Before You Buy
  • Amazon Pharmacy (U.S.): Prescription Medication Discounts




It is impressive how promoting an innovation culture proved so beneficial for Amazon.

An employee’s idea not only proved to be in the company’s favor but also enhanced customer experience. CXOs must cultivate a culture of innovation in their organizations.

An idea management tool can help you in the pursuit by encouraging ideas and idea culture in your organization. 

Want to get your hands on a good idea management tool? Try Idea Assist for 30 days– completely free. 

Liked our blog? Please recommend us.

Your feedback matters. Share away!

Have Any Topic Idea In Mind?

Let us know your topics of interest!

Subscribe To Our Weekly Newsletter!

Join the list of innovation evangelists and receive updates about the content you care about.

Get all our free resources delivered to you

You may also like