Prime membership surges as Amazon moves on broader market share

A survey of 500 Amazon.com customers by Consumer Intelligence Research Partners (CIRP) found that the e-commerce giant now has approximately 80 million Amazon Prime customers in the United States, up 37.9 percent from 58 million members over the same time period last year. The test was conducted over the first fiscal quarter of 2017.

With Amazon’s Prime Day sales promotion just around the corner (July 11), it’s likely that the percentage of U.S. shoppers subscribed to the service could tag on a few more percentage points in the days ahead. Prime Day is only available to subscribers, and has been extended to 30 hours this time around to draw in a larger audience. 

One important finding by CIRP was the rise in Prime members that subscribe on monthly basis, up to 26 percent from 21 percent in the previous quarter. CIRP co-founder Josh Lowitz explained that those users are where Amazon.com gets its full-time subscribers. With more U.S. consumers flirting with the idea of full time subscription, Amazon could see an increase in that high-spending Prime user demographic that CIRP estimates spends around US$1,300 per year.

Amazon doesn’t release the details of its Prime membership, so research firms like CIRP are forced to come up with their own estimates. However, regular surveys over the last few years show that, except for a slight decrease in momentum over 3Q 2016, Prime membership growth estimates logged quarterly growth rates of over 25 percent since March 2016.

Since U.S. Census Bureau data has only 20 percent of Americans banking more than six-figures per year, that means Amazon must be moving into lower earning demographics by now. That also suggests that the e-commerce company is succeeding in making Prime membership a successful alternative to weekly grocery shopping, rather than an upper-income-specific habit.

That lines up with Amazon’s announcement last month that it was making its Prime membership program more affordable to customers on government assistance programs, including food stamps. Customers with valid Electronic Benefits Transfer (EBT) cards now qualify for a discounted membership of $5.99 per month.