There are about 41 million Amazon Prime members in the U.S., according to a new survey from Cowen & Co. that reiterates a finding this summer from Consumer Intelligence Research Partners.
The program has attracted more wealthier and younger shoppers, who are increasingly finding apparel and other goods among its already healthy assortment. Prime members have an average household income of $69,300, well above that of non-Prime Amazon shoppers, 24.8% higher than that of Wal-Mart shoppers, and 4% above that of Target shoppers, according to Cowen. And Prime members are, on average, 36.5 years old, about the same as Target shoppers, and younger than Wal-Mart’s on-average 42 years.
A study this summer from Millward Brown Digital found that Prime members convert 74% of the time compared to 13% for non-prime members and 6% for other membership-based warehouse retailers. That study found that if membership growth for Amazon Prime continues at its current pace, half of all U.S. households could be Prime members by 2020.
Amazon's Prime membership program, which offers free shipping and a host of other perks for $99 a year, has continued be a source of frustration for other retailers, and the problem may be getting worse.
Wal-Mart has recently made a point of trying to find growth by appealing to wealthier shoppers, but will likely have to do much more to spiff up its stores and customer service—and lift its e-commerce game—in order to succeed. Target already caters to a younger, wealthier crowd, but doesn’t have the advantage of Amazon’s sticky Prime customer, who is likely to want to take advantage of the cool Benjamin they’ve already plunked down for membership.
It's this member that Amazon seems to be focusing on, hosting sales and events throughout the year that promote Prime membership. It's "Prime Day" Black Friday-in-July sale touted hundreds of sales exclusively for members, and the retailer said it signed up "hundreds of thousands" of new Prime members on the day.
One especially remarkable factoid from Cowen’s report is Amazon success in apparel sales, an area that it’s struggled with in the past and that is an especially tough retail space overall at the moment. In a previous survey, Cowen & Co. found that Amazon is on track to supplant Macy's to become the number one apparel retailer by 2017. Amazon is also considering producing its own private label line of clothing, which could help the retailer fill in the gaps left by some clothing designers that remain cautious of selling on the site. Both of these developments, if true, could spell even more trouble for both Macy's, and Target, both of which have long been employing its designer and celebrity collaborations to ramp up their offerings.