Since the inception of Amazon Prime membership in the year 2005, the subscription model grew in leaps and bounds and contributed heavily to the growth of Bezos’ empire.
According to the latest forecast by eMarketer, the Amazon US Prime members will grow an appreciable 14.9% YoY in 2020, to 142.5 million. That’s accounting for 50% of the country’s total population for the first time.
The United States has been one of the key markets for the flourishment of the subscription model. In 2019 when there were 124 million Amazon Prime users in the US, the worldwide count for Prime subscribers stood at 150 million. This indicates how the U.S. users accounted for 82.7% of the global Amazon Prime subscriber count by the end of 2019.
The latest estimation of the number Amazon Prime members in the US by the end of 2020 also indicate the increasing popularity of Amazon Prime in the US. With 14.9% YoY growth in 2020, Amazon is estimated to rope in 3 out of 4 digital buyers in the US.
Undoubtedly, Amazon is trying to make the most of the pandemic that has glued people with OTT platforms more than ever before.
Amazon is estimated to add record 18.5 million new Prime Members in 2020, and achieve the milestone of 150 million members in the US sometime in 2022.
Amazon Prime Members: Jeff’s Gamble
Jeff Bezos’ gamble of introducing the Prime subscription managed to raise the bar of the entire e-commerce industry when it came to including convenience in online shopping.
Consumer behaviour was observed to be changing because of the same as well. Online shoppers, freshly equipped with 1-day and 2-day delivery options, starting spending money on products which they wouldn’t buy otherwise.
No longer did shoppers need to turn to brick and mortar stores for ‘last-minute’ gifting or simply buying a pair of new socks. Amazon had truly become the ‘everything store’, all thanks to the Prime membership.
To date, Prime subscribers have been known to spend more and buy more when compared against non-Prime memberships primarily because Amazon enables fast and free shipping. However, another add-on that’s been helping users make up their mind about getting the subscription has been Prime Video.
Prime Day 2020: What To Expect
Every year the e-commerce giant, to celebrate their Prime subscribers, conducts a country-wise two-day event known as ‘Amazon Prime Day’. This year is no different. However, the pandemic and impending recession headwinds that 2020 is going through has somewhat dampened the overall zeal and enthusiasm the event brings every year.
This time Prime Day in the U.S. will be held on October 13th and 14th which is three months late from when the event typically takes place – around mid-July. As a result of this, the e-commerce giant will be pivoting its run-of-the-mill strategy of pushing ‘back-to-school’ and summer product categories. Instead, Amazon will make this U.S Prime Day all about the upcoming holiday season in the near future.
Industry analysts forecast that this time around Amazon will likely mint close to $9.91 billion in worldwide Prime Day sales, up 43% from what they made last year. To make it possible the eCommerce behemoth is leaving no stone unturned, be it homegrown or other markets. In India, the largest market for Amazon outside US, the eCommerce giant is gearing up for Great Indian Festival Season Sale with never before offers and deals.
The success of Amazon Prime membership could easily be measured from the fact that a majority 72% of Prime members in the US orders at least one product every week. In fact, 50% of members having Prime membership place more than 5 orders in a month.
When we take a close look at the order frequency of Amazon Prime members since the beginning of 2020, Prime members are becoming more frequent in placing orders every month. In February 40% of US Prime members ordered less than 2 products, but the trend changed in the following four months, as the percentage of such Prime members squeezed to 28% in June 2020.
To give a boost to its Prime membership further, Amazon has planned to give early access of all deals and offers to Prime members during the Prime Day and Great Indian Festival Sale.
One can expect to get bargain deals on Amazon’s range of devices such as Echo and the Fire TV as voice-enabled smart home electronics are gaining a lot of ground. Along with home appliances which aren’t in Amazon’s product categories such as Instant Pot multi-cookers and iRobot Roomba can be expected to be spotted in Amazon’s best sellers list as well.
Now, it remains to be seen how do consumers take to this year’s Prime Day event amid the economy being in a doldrum. We will keep you updated on all future developments. Until then, stay tuned.