Is Amazon starting to fall out of favor with American consumers?
A new survey has found that a majority of consumers prefer shopping at Walmart (online, in-store or both) versus shopping on Amazon.com.
The survey of 1,000 consumers by the retail data analytics firm, First Insight, is in its third year. This year, it found that 55 percent of respondents prefer shopping at Walmart, up from 47 percent in 2018. Those preferring Amazon fell from 53 percent in 2018 to 45 percent at present.
“The excitement of the Amazon box coming to your house is kind of dwindling off,” First Insight CEO Greg Petro told CNBC. “I think the novelty of Amazon is wearing off.”
According to the survey’s findings, the frequency at which consumers shop on Amazon is also dropping. In 2017, 80 percent of those queried said they shopped on Amazon six times or more per month. Today, 40 percent answer the same.
While the number of Amazon Prime memberships has been estimated to be over 103 million in the U.S., the survey found that the e-tail giant may be losing members. Fifty-two percent of respondents in this year’s survey were Prime members, down from 59 percent during the same timeframe in 2018. While there is no additional verification to support the survey’s findings on this point, Amazon has taken two key steps this year to increase the perceived value of Prime members.
Last week, Amazon announced that it was adding free, two-hour grocery deliveries from Whole Foods as part of the $119 annual subscription program.
The e-tail giant announced in April that it was investing $800 million to cut the time it takes to make deliveries to Prime members from two days to one. An earnings miss in the third quarter — Amazon earned $4.23 a share, down from $5.75 last year — created some unease among the investor class, even as many retail industry watchers saw the news as more evidence of the e-tail giant attempting to buy market share, as it has in the past.
Amazon founder and CEO Jeff Bezos expressed nothing but optimism on the switch from two-day to next-day deliveries for Prime members.
“We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” said Mr. Bezos in a statement. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers.”
- Amazon: Past Its Prime – First Insight
- Walmart appears to be gaining ground against Amazon – CNBC
- Will free deliveries for Prime members make Amazon the driving force in online grocery? – RetailWire
- Free next-day shipping hits Amazon in its bottom line – RetailWire
- Should (can) rivals meet the free one-day delivery bar being set by Amazon? – RetailWire
DISCUSSION QUESTIONS: Do you think Amazon has a Prime membership recruitment and retention problem? Have you seen evidence that suggests consumers are changing their minds about the value of shopping on Amazon with or without a Prime membership?