According to fresh data, Amazon’s crucial US Prime membership program has ended as the giant online battles a wider slowdown. While talking about recent estimates from Consumer Intelligence Research Partners, Amazon had 168 million Prime subscribers in the US at the end of last year, down from 170 million at the end of 2021.
Instead of total paying households, the research company analyses the number of individuals utilizing Amazon Prime. According to the company’s data, there were 17 million Prime members in 2013 when tracking started. According to CIRP, that was the first time the business experienced flat annual Prime growth in its largest market.
“Prime membership has essentially stopped growing in the US, after many years of extremely fast growth, and then modest growth in the last two or three years,” CIRP said.
According to CIRP’s estimates, 73% of all Amazon transactions in the US as of December 2022 were made by Prime members, an increase over the 66% penetration rate in the prior year. It stayed close to 60% in 2018 and 2019, according to CIRP.
“That, coupled with the flattening of Prime membership growth, suggests that Amazon is not attracting as many non-Prime members as in the past,” the CIRP report said.
Due to COVID-19 Amazon had a blooming business
This is noteworthy given that Amazon has been significantly investing in video streaming offerings, such as Thursday Night Football and The Rings of Power, to entice new Prime customers. According to CIRP’s calculations, these substantial investments yield only a small return.
During the early years of COVID-19, Amazon’s business was considerably increased by the shift to online buying caused by the epidemic. However, Amazon experienced a general slowdown as more consumers turned back to in-person purchasing, and the overall economic environment deteriorated. The massive retailer is engaged in a significant cost-cutting effort, leading to the greatest layoffs in business history.
The precise scope of Amazon’s Prime membership program has yet to be made public. Then-CEO of Amazon, Jeff Bezos, said there were “more than 200 million Prime subscribers globally” in 2021. For many years, subscription has driven customers’ increased spending, assisting Amazon in becoming the biggest e-commerce corporation in the Western world.
“Just because an analyst firm reports something doesn’t make it true or fact, and in this case, the research is not accurate,” an Amazon spokesperson wrote in an emailed statement. “Prime membership continues to grow as the value members receive continues to increase.”
Amazon Prime might be aware of the risk of US market saturation because it looks to be focusing on expanding in foreign areas. As previously revealed by Insider, Amazon transferred the Prime program under Russell Grandinetti, SVP of its international operations, in late 2021, indicating a more significant focus on non-US markets.