Amazon Prime Growth Slowing in the U.S.
Amazon Prime growth is plateauing in the U.S., showing the first signs of a slowdown in its oldest market, Morgan Stanley wrote in a note published last week. Prime, a paid membership program that offers free two-day shipping and access to other perks such as online video and music to consumers for $99 a year, is very important to Amazon.com. The membership program generates approximately $9 billion annually from subscription fees, and Prime members spend an estimated $1,300 with the retailer each year, nearly double the $700 non-members spend. According to CNBC, Morgan Stanley, which surveyed 1,000 U.S. adults in the third quarter of 2017, concluded that 40 percent of American consumers are currently Prime members — the same percentage seen in its survey from the fourth quarter of 2016.
Total Retail's Take: While this is encouraging news for retailers that compete with Amazon (i.e., everyone), there are still some silver linings for the Seattle-based company. For starters, Amazon Prime remains overwhelmingly popular in the U.S., and a 40 percent subscriber rate is still very healthy. In addition, according to the survey, 20 percent of non-Prime members rated their chances of becoming Prime members as "likely," which is the highest Morgan Stanley had seen in two years of surveys. Prime membership is also growing faster in other global markets, signaling potential in other countries.