Amazon Prime Has Good Adoption among Active Users
By Ina Steiner
Twenty percent of active Amazon customers are Prime members, or 12% after excluding free trial members, free/discount student users, and free Amazon Mom users, according to a new report.
Amazon's Prime membership program costs $79 for a year of free 2-day shipping, or 1-day shipping for $3.99 per item, which provides Prime members an incentive to begin their shopping on Amazon.com.
Wall Street firm Cowen and Company surveyed 1,633 active U.S. Amazon customers to learn more about Prime and how the service impacts shopping behavior.
Prime member satisfaction and likelihood to renew among paid users is very high, and 43% of eligible Prime members have used free video streaming in the past 12 months, compared to 11% of total active customers that have bought or rented an online video from Amazon in the past year. Customers who watch free Prime Instant Videos are much more likely to renew memberships than Prime users that only use free/fast shipping.
Cowen estimates that Amazon has 11 million paid Prime members and 19 million total Prime users in the US. Amazon has 164 million worldwide active customers, with an estimated 95 million of them in the US.
In his report, Cowen analyst Jim Friedland said he expects Prime members to exceed 50 million in the US over time. "To put our Prime user target in perspective, the two largest warehouse clubs in the US have achieved similar membership levels while offering fewer benefits: Costco has 65 million members ($55/member/year) and Sam's Club has 47 million ($40+/member/year). Amazon Prime members pay $79 per year."
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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