New forecasts from eMarketer indicate that, in 2019, over half of U.S. households will have an Amazon Prime membership.
The forecasts report that 51.3% of U.S. households will have signed up for Amazon Prime this year. The membership provides such benefits as free expedited shipping (sometimes on the same day, for certain zip codes), in addition to the free streaming of certain movies, TV shows, and music.
Here's a closer look at the Prime membership, and Amazon's current position in the ecommerce market.
Prime Time Numbers
After years of keeping its Prime membership metrics a secret, Amazon CEO Jeff Bezos revealed in his 2018 annual letter to shareholders that the company had over 100 million paid Prime members around the world -- 13 years after the service originally launched.
In the U.S., eMarketer says, the number of paid Prime memberships was 58.7 million in 2018, which its forecasts says will increase by 5.2 million this year.
It's interesting to note that this forecasted increase in Prime memberships comes on the heels of an increase to its price, which Amazon has only done twice.
In 2014, the annual cost of a Prime membership grew from $79 to $99. Last may, it rose again to $119 per year.
But with the increased price, however, has also come an expansion of services offered with Prime. In addition to the preexisting expedited delivery and streaming entertainment benefits -- where original, award-winning programming was introduced in 2013 -- Prime members are also treated to Prime Now: an additional Amazon service that provides free two-hour delivery of household items, groceries, and items from local restaurants.
Since Amazon's acquisition of organic grocery store chain Whole Foods in 2017, Prime perks have also expanded, treating members to in-store discounts, as well as free two-hour delivery from nearby locations through Prime Now.
And, as eMarketer's analysts pointed out, Amazon could be looking to diversify its customer base with a number of newer, more flexible payment options -- included discounted memberships for students ($6.49/month) and customers who receive government assistance ($5.99/month).
Following the Evolution of Consumer Behavior
Where They're Buying
As a growing number of consumers buy goods online, with greater frequency, the logic could follow that more of them are looking for incentivized programs to do so, like Amazon Prime.
For example, when we asked 869 people across the U.S., UK, and Canada, "Which of the following best describes how you did your holiday shopping for 2018?", 56% of respondents indicated that they did at least some of their shopping online.
Data collected with Lucid
And with more consumer looking to make purchases in a digital landscape comes a growing number of advertisers vying for their attention.
The Ad Game
Along with its growing rate of Prime memberships, for instance, Amazon is also gaining momentum as a leading digital advertising platform. With recent reports that companies will spend more on digital ads in 2019 than they will for those appearing on more traditional formats, like TV and print -- Amazon is exceeding previous forecasts of its digital ad spend share by about 25%.
And with recent developments in the digital ad space -- such as Facebook's near-future launch of a "clear search history" feature, which could limit user data available to advertisers for targeting -- Amazon's growth could continue to excel in this area, especially as a growing number of consumers partake in its membership programs.
Amazon, meanwhile, continues to grow and maintain a vast trove of data on user preferences and buying behavior. The company has expanded its collection methods, too, in part with its cashierless Go stores -- where the store's "walk-out technology" enables customers who have downloaded the Go app to add the items they want to a bag and leave, with the help of sensors.
That sensor technology provides Amazon with a powerful hybrid of on-an-offline behavioral user data, augmenting its ad targeting capabilities.
Amazon's Go store in San Francisco, CA
To that point, according to data from Consumer Intelligence Research Partners (CIRP), Amazon Prime members spend over 2X as much as non-members do each year, at about $1,400 versus $600.
On top of that, 54% of product searches on the internet take place on Amazon, according to Ben Winters of Ideoclick, a company that works with manufacturers to optimize online sales -- signaling a potential correlation between the amount spent by consumers on the site and the dollars spent to target them with ads.
After all, as previous reports have indicated, any Amazon search results that appear above the fold — everything visible on the screen before scrolling down -- are ads.
An Amazon search for "dog food" yields only ad results above the fold
The point of all of this: Amazon's audience appears to be growing, and for certain growth companies, that translates to a growing audience for promotion and exposure. (Andrea Leigh, also of Ideoclick, offered some advice for how to leverage that ad platform growth at Code Commerce last fall.)
Consumer preferences will likely continue to evolve, leading to a shift in the best ways and places to reach them.