Amazon Prime is in nearly 41 million U.S. households
January 14, 2016 03:33 PM
About 10 million U.S. households joined Amazon.com Inc.’s Prime program between December 2014 and December 2015, pushing total U.S. subscribers to nearly 41 million, according to a new estimate from Cowen & Co. investment bankers.
That’s equal to approximately 38% of all U.S. households connected to the Internet, or 2 in every 5 such households. Cowen’s estimates are based on a monthly survey it conducts of 2,500 U.S. consumers.
Prime customers are eligible for free 2-day shipping and access to a growing array of other benefits, including streaming video content, e-books, photo storage and music. Standard pricing for a Prime membership in the United States costs $99 a year, although Amazon occasionally offers discounts to gain new signups. For example, the price starting tomorrow and running through Sunday is $73, part of a promotion Amazon says is to celebrate one of Amazon’s original programs, “Mozart in the Jungle,” which won two awards at the 73rd Annual Golden Globe Awards on Sunday.
Amazon Prime is important to the e-retailer as data from Cowen and other groups show that consumers who join Prime shop more on Amazon. In December, for example, Prime customers made purchases across an average of 3.9 product categories, whereas non-Prime Amazon shoppers made purchases across an average of 2.3 product categories, Cowen says.
Also in December, Prime members accounted for approximately 46% of purchasers, down from the approximately 49% tracked from July to November. “We note the dip is almost entirely a result of strength within the non-Prime cohort, which would suggest Amazon was able to attract incremental holiday shoppers in addition to its loyal Prime [subscriber] base,” John Blackledge, Cowen director and senior research analyst, writes in the research note.
Prime customers also help Amazon quickly gain ground in product categories, such as apparel, to the detriment of other retailers. The number of consumers who bought an apparel item (clothes, accessories or shoes) on Amazon.com in the fourth quarter, for example, grew 24.6% year over year across all Amazon shoppers. Segmenting consumers into Prime and non-Prime, Prime apparel purchasers grew 50.2% over the same time frame. Non-Prime purchasers fell 29.7%.
For the full year, Cowen says the number of consumers who bought apparel on Amazon grew 28.9%. Meanwhile, the number of consumers who bought apparel at Wal-Mart Stores Inc. fell 4.4%. At Target Corp., apparel purchasers fell 2.8%. Cowen predicts Amazon will become the top seller of apparel in the United States in 2017. For more on Amazon’s pursuit of the apparel category, see the January cover story of Internet Retailer magazine.