Over the past 15 months Amazon.com Inc. has rolled out Prime Now delivery to consumers in 24 U.S. metropolitan areas accounting for about 34% of the population. Prime members in those locales are quickly adopting the service, which delivers orders in an hour or less for $7.99, or for free in two hours or less.
The results of Cowen & Co.’s monthly Cowen Consumer Internet Survey finds 25% of Prime customers made a Prime Now purchase in January, with 24% of those users saying they make Prime Now purchases weekly. 1,250 Prime subscribers took the investment group’s survey.
Only Amazon Prime subscribers can place orders through the Prime Now mobile app. Prime Now ordering is not accessible from Amazon.com, and the SKUs available for Prime Now delivery vary by location, from about 15,000 to 40,000. In some markets, Prime customers can buy groceries from local merchants or get restaurant food delivered via Prime Now.
Amazon does not disclose how many Prime subscribers it has in the United States, but the latest estimates range from 41 million, per a Cowen estimate from December, to 54 million, per a January estimate from securities research firm Consumer Intelligence Research Partners LLC. The annual fee for Prime is $99 and includes access to expedited delivery options, streaming music and video, cloud storage and other benefits.
By demographics, 31% of respondents age 25-34 say they ordered with Prime Now in January. That’s followed by 30% of respondents age 35-44, 22% age 55-64, 19% age 18-24, 18% age 45-54 and 12% age 65-90.
And while Prime Now penetration with the youngest adults (18-24) in the survey fell below the 25% overall average, the millennial-age consumers who did use Prime Now say they use it a lot: 60% say they placed 2-3 orders with it in January. A third of Prime Now users in this age group used it to procure groceries from local merchants, indexing higher than the 22% all-ages average for the grocery category. Adults age 18-24 also more often purchased goods from local merchants across all product types, with 38% buying locally via Prime Now.
“Prime Now could be a key cog in Amazon’s efforts to increase share in large categories like consumables, food and beverage, among other areas,” Cowen analyst John Blackledge writes in the research note detailing the survey results. “Our early survey work suggests the strategy is working.”
The top shopping categories for Prime Now delivery, according to the Cowen survey, in descending order are:
- Electronics selling for less than $50
- Personal care products
- Electronics selling for more than $50
- Household products
- Children’s/baby products
- Pet products
- Home/garden products
- Office supplies
- Sporting goods.
Amazon offers Prime Now in: New York; Los Angeles; Chicago; Houston; Dallas; San Francisco; Atlanta; Seattle; Miami; Minneapolis; Phoenix; San Jose, Calif.; San Diego; Baltimore; Portland, Ore.; Indianapolis; Austin, Texas; Sacramento, Calif.; Nashville, Tenn.; San Antonio; Las Vegas; Virginia Beach, Va.; Raleigh, N.C.; and Richmond, Va. Amazon also has Prime Now markets in the United Kingdom and Japan.