There is no retailer that is taking e-commerce to another level that Amazon and its’ new count of prime members is showing it. Internet Retailer recently reported that Amazon now has reached 50 million prime members, which some even estimate the membership at 54 million. This only sets up the retail leader for greater market expansion this year and beyond. More than likely, those customers are only going to generate more unpaid advertising for an e-retailer that is lengthening its’ gap between itself and the competition.
Yet along with the 54 million membership reach, the average spending per Prime member declined. Securities research firm Consumer Intelligence Research Partners LLC estimated that Prime members spent an average of $1,500 yearly on Amazon. In the fourth quarter of 2015, that figure dropped by 27% to $1,100. CIRP co-founder and partner Michael Levin, stated that there are two reasons for the spending change. One is that free streaming media options are becoming a bigger part of Prime, and some Prime members paying the $99 annual fee prioritize that over the expedited shipping benefit, resulting in lower spending. “Second, as Amazon Prime grows, it starts to include a wider range of consumers, including casual or less frequent shoppers,” he said, as early Prime members were the biggest spenders.
Year after year, Amazon’s Prime membership grows 35%, according to the CIRP. The 54 million membership is said by the Consumer Intelligence to equal 47% of all US Amazon shoppers. The article stated its’ quarterly survey was based on 500 US Amazon shoppers that made a purchase on Amazon.com during the quarter. The new Prime member count was at 40 million in December 2014. One of the interesting findings from the Consumer Intelligence is that half of Amazon’s total 14 million shoppers became Prime members during the fourth quarter of the year. Amazon stated that 3 million were added in the third week of December alone.
This shows that Amazon is gaining more members during the holiday season than in any other part of the year. It is the time that most retailers make their most sales, even to make up for any quarter losses. Also, there has not been another retailer that has shown that it can deliver online purchases more effectively than Amazon. It appears that shoppers during the holidays are opting to choose a retailer that they can trust and it makes sense that Amazon’s Prime membership will continue to thrive between Black Friday to Christmas.
One key that has led to Amazon Prime growth is its’ expansion of free same-day delivery. The new fast service allows shoppers to get their online items on-demand. Amazon launched free same-day delivery last year in 14 metropolitan cities the US, beginning with California cities in the Southland, which included San Fernando Valley to Irvine, the Redlands and Moreno Valley in the east. The other cities to join the list included the San Francisco Bay Area, Baltimore, Boston, Dallas-Fort Worth, Indianapolis, New York, Philadelphia, Phoenix, San Diego, Seattle-Tacoma, Washington DC, Tampa Bay, and Atlanta.
The online retail front-runner has the optimal logistics delivery system that is making the difference and other retailers can take note. Retailers can partner with a Same-Day Courier like AQuickDelivery the develop an effective delivery model to market and attract more shoppers to buying from them online. The Atlanta Courier has the expertise and driver fleet to quickly implement same-day delivery, next-day delivery and in-store pick up.
Reference: 1.26.16, Internet Retailer, Allison Enright, Amazon Prime membership sails past 50 million