Loyalty Strategy

Amazon Prime Will Consume the Earth

Amazon Prime now boasts 90 million membersWhile the actual number of Amazon Prime memberships in the US are a closely guarded secret, that secrecy doesn’t keep various research organizations and analysts from speculating on the total number. The latest number comes from Consumer Intelligence Research Partners (CIRP), which estimates that Amazon Prime now boasts 90 million members. With Morgan Stanley research also showing that customer loyalty to Amazon is increasing, what force will prevent Jeff Bezos from total world domination? Let’s look at the numbers.

By Rick Ferguson

Chain Store Age has a helpful summary of the CIRP research, based on a survey of 500 U.S.-based Prime members – that’s a small sample size, but we’ll let it slide. Here’s our summary of Chain Store Age’s summary:

  • Amazon Prime now has 90 million members in the United States.
  • Prime members spend on average $1,300 annually, compared to $700 from non-members.
  • 63 percent of Amazon customers are Prime members.
  • 95 percent of Prime members report that they will “definitely” or “probably” renew their Prime membership.
  • Over the past 12 months, Prime membership grew by 38 percent.

Those are intimidating numbers for competing retailers, and they don’t stop there; a recent Morgan Stanley Alphawatch Apparel survey revealed that Amazon has a 62 percent Net Promoter Score (NPS) – the highest score amongst apparel retailers surveyed, and a 14 percent increase over last year. Amazon loyalty isn’t based on price, either. Discount apparel retailer TJ Maxx actually beat Amazon on price perception in the survey, but fell short on customer loyalty. Those numbers mean that, at least in the apparel category, a considerable number of apparel shoppers are more loyal to Amazon even though they perceive that the company’s apparel prices aren’t as low as TJ Maxx’s prices.

The difference: Amazon Prime, which has proven such a sticky loyalty program that 95 percent of those 90 million members are planning to renew. Paying that $99 membership fee facilitates a “walled garden” effect that keeps Prime members loyal even in the face of perceived higher prices. Even allowing for excessive deviance in the survey due to the small sample size, we may safely assume that most Prime members will renew. As long as Amazon keeps demonstrating value to Prime members, and focusing relentlessly on the value of those customer relationships, Amazon will continue to set the pace for the rest of the retail industry.

Rick Ferguson is Editor in Chief of the Wise Marketer Group and is a Certified Loyalty Marketing Professional (CLMP).

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  1. Pingback: Is it worth adding a paid subscription membership level to your loyalty program?

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