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Study: Amazon Prime doubles in size in two years

BY Deena M. Amato-McCoy

The number of Amazon Prime members are on the rise.

An estimated 60% of Amazon customers are Prime members, a group that is comprised of roughly 80 million members in the United States, according to research from Consumer Intelligence Research Partners (CIRP). The study is based on responses from 500 U.S. shoppers who made a purchase at Amazon.com between January and March.

Prime members spend on average about $1,300 per year, compared to about $700 per year for non-member customers. The current membership figure compares to an estimated 58 million U.S. members at the end of the March 2017 quarter — an increase of 38% in one year, according to the report.

“Looking back, Amazon Prime membership doubled in the U.S. in two years,” said Josh Lowitz, partner and co-founder of CIRP.

“While slower growth is expected as it reaches natural limits, Amazon had a surprisingly strong quarter,” Lowitz said. “Membership grew 8% in the most recent quarter, compared to 7% growth on a smaller base in the year-ago quarter ending in March 2016.”

According to Amazon’s December 2016 financial release, the company reported $6.4 billion in worldwide “retail subscription services.” This includes Amazon Prime fees and various forms of digital media subscription fees.

“While it’s tempting to use the newly released services figure to estimate Amazon Prime members, it does miss a couple of important factors,” said Mike Levin, partner and co-founder of CIRP.

“First, between 5%-10% of Amazon Prime members don’t pay the standard fee or at all for their membership because they are within the 30-day free trial period, or because they take advantage of Amazon Student or other similar reduced-fee programs,” he said. “Second, Amazon’s accounting for Prime membership fees spreads the fee over a full year, and recognizes only a portion of the $100 fee each month, so partial year members further distort the equation. In this way the $6.4 billion figure does not reflect a year of revenue from each Prime member.”

Based on this criteria, CIRP estimates that 26% of Amazon Prime members have elected to pay monthly for a membership, instead of annually. Since April 2016, Amazon offers Prime members the option of paying $10.99 per month instead of $99 per year.

“The monthly payment plan proved attractive, even thought it costs more than the annual plan,” added Lowitz.

“We think that the monthly membership option appeals to the later Prime adopters, with a smaller, potentially temporary commitment, that ultimately yields a long term commitment,” he said. “With smaller dollar, single month decisions, the new plan winds up helping with retention rates, which already average 85% for a member renewing after their first year.”

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Major expansion for Nevada outlet center

BY Al Urbanski

One does not live by bargains alone, and the latest outlet center to realize that and pick up its food and beverage game is The Outlets at Legends in Sparks, Nevada.

RED Development announced that six new restaurants are slated to open at the center, including The Habit Burger Grill, Jersey Mike’s Subs, and Chick-Fil-A. A 75,000-sq.-ft. retail space expansion is also underway, led by a 40,000-sq.-ft. Burlington Coat Factory outlet with a planned opening in spring of 2018.

Other newcomers Buckle and Charlotte Russe should be open for business by summer, joining H&M, which opened earlier this month. Legends tenants benefit from a huge draw not found at most outlet centers — a Galaxy Theatres complex featuring an IMAX screen.

RED reported an average 10% sales growth this year to retailers at Legends, which will total 1.2 million sq. ft. at full build-out.


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Women’s sporting goods retailer elevates its brand message

BY Deena M. Amato-McCoy

Title Nine is dedicated to creating a community among its shoppers — and now its e-commerce site supports this endeavor.

The women’s outdoor and athletic apparel retailer has elevated its digital brand experience, regardless of whether shoppers visited via desktop, mobile and tablet. By adding Kibo’s eCommerce solution, Title Nine upgraded its site functionality through enhanced content on each product page; personalized selling tools, such as bra calculators and fitting and style tips; improved checkout flow in all channels, and an engaging mobile experience for Title Nine shoppers. Keeping its focus on community and female empowerment top of mind, the chain also integrated social features on its home page, including displaying Instagram photos of customers wearing Title Nine apparel while swimming, running, hiking, or traveling.

These upgrades have delivered higher conversion rates across all touch-points, and improved customer interaction with the brand, according to the company.

“The Kibo eCommerce solution has not only allowed us to expand features and functionality of our new site, but it has created a more seamless shopping experience for our customers,” said Chrissy Ginieczki, VP of marketing and e-commerce, Title Nine, which operates 23 stores in 11 states. “Our goals with the new site were to put more emphasis on building a community of customers, and to help them more easily find the products they want. Kibo helped us achieve those goals.”

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