Consumer Intelligence Research Partners, LLC (CIRP) today released an analysis of buyer shopping patterns for Amazon, Inc. (NASDAQ:AMZN) for the first quarter of 2021.
As of March 31, 2021, CIRP estimates in the US, Amazon Prime increased conversion
and retention rates compared to the March 2020 quarter and earlier quarters. In the
March 2021 quarter, Amazon Prime had a 30-day conversion rate of 69%, a first-year
the renewal rate of 93%, and the renewal rate of 98% after the first year.
“As we’ve studied Amazon Prime, the renewal rate for existing members has remained
high, and even increased slightly in the past year,” said Josh Lowitz, Partner, and CoFounder of CIRP. “The central growth equation for Amazon Prime is to add new members
while minimizing the loss of existing ones. New members are added when they convert from a 30-day free trial to paying for membership.
That conversion rate has varied over the years and improved recently. This conversion rate recovered once Amazon allowed members the flexibility of paying monthly. The renewal rates measure how well Amazon keeps Prime members.
It’s largely a function of how useful members find the various benefits, such as faster free shipping or streaming video and music.
Clearly, the COVID-19 pandemic made shipping benefits more valuable and helped boost renewals, now at the highest levels we’ve seen in the eight years we’ve studied the program.
Amazon Prime membership grew in the March 2021 quarter, to 147 million members in the US. While the number of Amazon customers grew, 61% of them reported having an Amazon Prime membership, which is consistent with past quarters.
“In the full year of pandemic shopping, Amazon Prime boosted membership at a faster
rate than in the past few years” added Mike Levin, Partner, and Co-Founder of CIRP.
“Amazon added about 30 million US members in the past year, as home-bound
consumers found the shipping benefits and other features highly relevant. The elevated
renewal rates allowed Amazon to keep even more customers and reduce ‘churn’. And,
as the conversion rate from trial to paid membership recovers from lower levels a year
or two ago, Amazon is adding more members without losing existing ones.”