Amazon Prime Gains on Improved Retention

US Prime Membership Increases to 44 Million Members

Consumer Intelligence Research Partners (CIRP) released analysis of buyer shopping patterns for Amazon, Inc. (NASDAQ:AMZN) for the April-June 2015 quarter.

This analysis indicates that Amazon Prime now has 44 million US members, spending on average about $1,200 per year, compared to about $700 per year for non-members.

As of June 30, 2015, CIRP estimates that in the US, 47% of Amazon customers are Prime members, which translates to about 44 million Prime members (Chart 1).

Chart 1: US Amazon Prime Members

US Amazon Prime membership has grown significantly since we first started measuring it in 2012. It has more than doubled in a little more than two years. Amazon adds millions of 30-day free trial members in the holiday shopping period. It then needs to convert these trial members to paid annual members, and then persuade those members to renew for subsequent years.

Amazon Prime added a net 3 million members as of the end of the second quarter of 2015. We ascribe much of this growth to better retention of members at the one-year mark. The conversion rate from 30-day members remains steady at about 70% through the most recent quarter, but Amazon improved its paid member retention with an increased renewal rate for one-year members. In the most recent quarter, about 95% of Amazon Prime members renewed a paid membership after one year, up from under 90% in the previous two quarters. Amazon's efforts to make the Amazon Prime membership more valuable and further integrated into customers' lives, with enhanced video and music offerings, as well as additional shipping benefits, appears to have paid off.

CIRP bases its findings on surveys of 500 US subjects who made a purchase at in the period from April-June 2015. For additional information, please contact CIRP.