The number of people signing up for Amazon Prime slowed in the first quarter, with only one million net customers added. The quarter looks especially weak compared to an end-of-the-year marketing blitz in 2014 that led to the company announcing it added 10 million Prime customers.
In a report released today by Consumer Intelligence Research Partners, it estimates that Amazon Prime now has 41 million U.S. members, up from 40 million at the end of the 2014.
“We think that the influx of new Amazon Prime members in the holiday quarter of 2014 included an unsurprising percentage of shoppers that did not continue their membership following their 30-day free trial,” Josh Lowitz, CIRP’s partner and co-founder. “Given this Prime customer acquisition reality, the net result is in a small increase in members relative to the holiday quarter.”
Amazon Prime members pay $99 a year for faster shipping speeds and access to a number of benefits, such as video and music streaming and book rentals. Amazon does not say disclose the how many Prime members there are.
In addition to a drop in new sign-ups, Amazon Prime members also appear to be spending less, with CIRP estimating that the average Prime user is now spending about $1,100 per year on average, compared to about $700 per year for non-members. Last quarter, it estimated that these valuable members were spending $1,500 a year, compared to non-members who spend about $625 a year.
In an email, the research firm confirmed this trend, saying the majority of the change reflects seasonality in spending, with the higher $1,500 figure in Q4 reflected holiday spending.
It would be more disturbing trend if Amazon Prime members began to shop less or spend less money on the platform. The Seattle retailer has been investing heavily in the program, believing that one component of the program feeds the other. In the past, it has said some people may sign up for a free trial of Prime to watch their favorite TV show, but then may end up sticking around to shop. As a result, it can justify the high costs of obtaining content and investments in other areas.
Finally, CIRP also estimates that 34 percent of Amazon customers in the U.S. own Kindle tablet or e-reader, while 5 percent of Amazon customers own a Kindle Fire TV box or stick, and less than one percent of own an Amazon Fire smartphone or Amazon Echo. Amazon Kindle owners are even more loyal to Amazon, spending $1,300 per year compared to $650 per year for customers who do not own a Kindle device, according to CIRP.
