Despite Prime Price Increase, Tablet Competition, Both Promote Amazon Brand
Consumer Intelligence Research Partners (CIRP) released analysis of Amazon Prime members and Kindle device owners from Amazon, Inc. This analysis indicates that these programs have become significant drivers of Amazon sales, even in light of the recent Amazon Prime price increase, and significant competition in the tablet computing market.
42% of buyers Amazon Prime members and 48% have a Kindle Fire, Kindle e-Reader, or both (see charts).
Based on the survey data, we estimate that as of March 31, 2014 Amazon Prime as 27.8 million members in the US, and that 31.3 million Kindle Fire and Kindle e-reader devices are in consumers' hands. Both serve as superb affinity programs for Amazon, as Kindle owners spend 30% more, and Prime members spend twice as much, as the rest of Amazon's customers.
Amazon Prime grew quickly, with almost one-third of current Amazon Prime members joining in the past year (see chart).
These newer Amazon Prime customers have not yet made their first renewal decision, so they may not have completely considered whether Amazon Prime shipping and video benefits are worth it to them them, and thus are susceptible to churn. However, our analysis suggests that 85% of current customers were already aware of the increase in price to $99 per year. And, even with the price increase, almost 90% of current Amazon Prime members say they will 'definitely' or 'probably' renew their membership, just 5% less than the responses we saw prior to any discussion of a price increase.
CIRP bases its findings on a survey of 500 US subjects, from April 1-6, 2014, that made a purchase at Amazon in January - March 2014 period.
For additional information, please contact CIRP.