Amazon Prime memberships continue to climb
November 22, 2016 04:24 PM
Roughly 45% of U.S. consumers, as of October, live in a household that has a membership to Amazon Prime, according to a new estimate from Cowen & Co. investment bankers.
Cowen bases its estimates on a monthly survey of 2,500 U.S. consumers. It says the 45% equates to 49.5 million Prime subscribers—most of whom pay $99 annually to Amazon.com Inc. to be a Prime member. Cowen says about 40 million U.S. consumers were Prime members in October 2015.
Cowen’s estimate is more conservative than a recent estimate from Consumer Intelligence Research Partners (CIRP), which said Amazon had 65 million Prime members at the end of September. CIRP estimates are based on a survey of 500 U.S. consumers who made a purchase on Amazon during the prior three months.
The Amazon Prime program includes free two-day-or-faster shipping, streaming video and music, online photo storage and early access to select shopping deals, among other perks.
Amazon does not say how many Prime members it has, however it is actively looking to recruit more going into the holiday season. On Friday (Nov. 18) it dropped the Prime membership fee from $99 to $79 for the one day; that day was exactly one week ahead of Black Friday, or the day following Thanksgiving that is a major shopping day for holiday gifts. Amazon, No. 1 in the Internet Retailer 2016 Top 500 Guide, this week kicked off a Black Friday Deals Week promotion and says it will offer new deals as frequently as every five minutes through Dec. 22.
Amazon has become a default shopping destination for consumers over the Thanksgiving holiday weekend. A survey of 3,000 U.S. consumers during the five-day Thanksgiving through Cyber Monday period last year found that 87% of U.S. consumers said they would check Amazon at least once during their shopping process. 47% said they’d check Amazon for 50% or more of their holiday purchases overall, and 73% said they’d make a purchase on Amazon during that five-day period. Digital marketing and analytics firm BloomReach Inc. fielded the consumer survey.
This season Amazon is courting Prime members with early access to deals and deals available only to Prime members. Prime members get the chance to jump on some limited-time deals 30 minutes before non-Prime members. If a Prime member owns a device that uses Amazon’s Alexa voice-recognition software, such as the Echo or Fire TV streaming device, Amazon is offering them deals not available to consumers who don’t own those devices or are not Prime members.
Amazon wants to acquire more Prime members because they spend more money and shop across a wider range of product categories than non-Prime consumers. Prime members place an order with Amazon an average of 3.5 times per month versus 2.3 time per month for non-Prime members, according to a Cowen Prime analysis from September. Prime members in October shopped across an average of 3.8 categories versus 2.3 categories for non-Prime members, Cowen says.