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Screenshot by Jason Cipriani/CNET
E-commerce giant Amazon has apparently found the key to getting US customers to spend more on its site: Prime.
At the end of 2014, Amazon Prime had 40 million US members, up from an estimated 29 million at the end of the third quarter, new data from Consumer Intelligence Research Partners shows. CIRP estimates that the average Amazon Prime customer spends $1,500 per year on the e-commerce site, compared to $625 for nonmembers.
Amazon Prime is a subscription-based service that costs customers $99 per year. In return, members get free two-day shipping on Prime-eligible products, access to Amazon’s streaming services Prime Instant Video and Prime Music, and other perks.
The willingness of Prime members to spend more heavily perhaps suggests why Amazon is willing to throw so many different services into the offering. Prime started as a way for customers to save money on shipping while getting items more quickly. Over time, as Amazon brought on its instant video streaming, photo library, and Kindle Owners’ Lending Library, which gives users free access to a limited number of books, it bundled them with its Prime service to make it more attractive.
CIRP’s data is based on surveys of 500 US “subjects” who made a purchase on Amazon in the fourth quarter. The 40 million member number comes from CIRP’s estimate that in the US, 45 percent of Amazon customers are Prime members.
Amazon did not immediately respond to a request for comment.
