While Amazon (NASDAQ: AMZN) shares very little data about its Prime membership base, independent research shows that the company may have as many as 90 million subscribers who pay for a suite of perks including free two-day shipping and streaming video. That estimate is based on a 500-person survey conducted by Consumer Intelligence Research Partners (CIRP).
The CIRP data also show that Prime members, who pay either $99 a year or $10.99 a month for the service, spend about $1,300 a year on Amazon.com versus $700 for non-Prime members. They also have proven incredibly loyal, which gives the online retailer protection against new competitors or business models.
"The share of members that indicate they are likely to renew for another year has remained high for several quarters, always comfortably above 90%," CIRP partner Mike Levin said in a press release. "In fact, in some quarters, literally no customers in the sample indicated they would definitely not renew their Amazon Prime membership."
Now, a new survey (registration required) from Feedvisor shows that Prime members are what the self-described "algo-commerce" company calls "super users." Eighty-five percent of Prime members browse for products at least once a week, and nearly half (45%) make a purchase at least once a week, according to the survey of 1,500 Amazon shoppers.
Amazon has its own fleet of trucks and planes. Image source: Amazon.
Amazon owns the shopping experience
"Amazon used to be the place you go to compare prices and find specific items, but what we see now is that the company owns the entire purchase process, from the first search to the final purchase," wrote Feedvisor Global Market Vice President Claudia Hoeffner in an email to Motley Fool.
The survey discovered a number of things about Amazon users in general:
- 75% of Prime members check prices on Amazon before looking elsewhere.
- More shoppers are using mobile, with 47% electing to use mobile devices in this year's survey versus 41% last year.
- Faster delivery is something people will pay for. Forty-three percent of those surveyed said they would pay $10 or more for delivery within an hour while 32% would pay $10 or more for same-day shipping.
- While only 22% of Amazon users said that they are "more likely to purchase their groceries on Amazon because of the Whole Foods acquisition, another 37% will now consider it."
Amazon's regular customers are clearly engaged with the brand, but Prime members take that even further. Hoeffner explained in her email what her company means in calling them super users.
"Prime members shop more (46% shop online more than two times per week), visit Amazon more (31% visit Amazon daily), and purchase more from Amazon (46% purchase from Amazon at least once a week)," she wrote. "Prime members are also more avid mobile shoppers, with half reporting that they use mobile devices most often to make a purchase, compared to 41% of non-Prime members."
Prime is Amazon's moat
Prime has set the standard for membership programs to the point that it has continued to grow even with rival Wal-Mart offering free two-day shipping on any eligible order over $35. Yes, Prime members get more than just the shipping deal, but that offer remains the core of the program.
Wal-Mart has a much smaller selection of items than Amazon Prime -- a few million to over 100 million. But even if Wal-Mart catches up (or gets a lot closer) it's hard to see that swaying many Prime members.
The Prime service, as you can see from the data above, becomes a major part of members' shopping lives. That, plus the fact that Amazon keeps making Prime better -- whether that be with new perks or improved delivery times -- gives the online leader a major hook into its customers that keeps them from leaving.
More From The Motley Fool
- 3 Growth Stocks at Deep-Value Prices
- 5 Expected Social Security Changes in 2018
- 6 Years Later, 6 Charts That Show How Far Apple, Inc. Has Come Since Steve Jobs' Passing
- 10 Best Stocks to Buy Today
- The $16,122 Social Security Bonus You Cannot Afford to Miss
- Bitcoin's Biggest Competitor Isn't Ethereum -- It's This
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.