The Census Bureau pegs the number of households in the U.S. at just under 126 million with 2.53 members per household on average. Based on new research, one could assume a good many of those households now contain someone who is a member of Amazon Prime.
The e-tailing giant has grown the ranks of its Prime memberships to 90 million in the U.S., with 63 percent of all shoppers on Amazon belonging to the program, according to Consumer Intelligence Research Partners (CIRP). The number of memberships is critical to Amazon’s sales success as the average Prime program participant spends $1,300 per year, nearly twice the roughly $700 a year spent by non-members.
“Membership grew six percent in the most recent quarter, the same rate as in the June 2017 quarter, and better than the three percent in the year-ago September 2016 quarter,” said Josh Lowitz, partner and co-founder of CIRP, in a statement. “Over the past twelve months, Prime grew by 38 percent, the same growth rate as in the same twelve-month period the year before, from October 2015 to September 2016.”
While free two-day deliveries are generally mentioned as the most important element of Prime memberships, Amazon has added a number of perks including access to free videos on the site to build demand. Renewal rates among Prime members, according to CIRP, remains very high with 95 percent of those surveyed saying they would “definitely” or “probably” re-up at the end of their current subscriptions.
“The share of members that indicate they are likely to renew for another year has remained high for several quarters, always comfortably above 90 percent,” said Mike Levin, partner and co-founder of CIRP. “In fact, in some quarters, literally no customers in the sample indicated they would definitely not renew their Amazon Prime membership.”
Others, particularly Walmart, have tried to match fire with Amazon Prime. In January, the retailer announced it would offer free two-day shipping with no annual fee for orders with a minimum purchase of $35 (down from $50) on walmart.com. Amazon came back and lowered its minimum to $25.
- Amazon Prime Hits 90 Million US Members As Growth Reaches Limits, Almost All Members Intend to Renew – Consumer Intelligence Research Partners, LLC
- Online and Amazon to grow more dominant over the next decade – RetailWire
- Amazon Prime’s retention rates are just sick – RetailWire
- Will free two-day shipping give Walmart an edge over Amazon – RetailWire
- Wal-Mart Sees ‘Second-Mover Advantage’ in E-Commerce – The Wall Street Journal