Amazon Prime members contributed $6.4 billion in subscription revenue alone to the online behemoth in 2016. And that doesn’t count the fact that the average Amazon Prime member spends nearly double with Amazon each year, $1,300, than the typical non-Prime Amazon customer, $700, according to Consumer Intelligence Research Partners.
So what can other retailers learn from the digital behavior of this cohort, which CIRP estimates at around 80 million consumers?
Many things, foremost among them that Prime members are very heavy online shoppers and are not wed exclusively to Amazon. In fact, they spend lots of time on other retailing apps and websites and, as a result, are good prospects for competitors who can rival Amazon’s seamless shopping experience. And they use mobile apps heavily, making that an important part of the strategy for any retailer seeking to compete effectively with Amazon for its core customers.
To conduct an in-depth analysis of Amazon Prime members, my company passively tracked the behavior of approximately 300 of them and compared their behavior to slightly more than 400 non-Prime consumers. All were tracked from Aug. 1 to Dec. 31, 2016, via the opt-in KnowledgePanelDigital, a cross-device single source panel that passively tracks digital behavior among a sample of mobile (smartphone or tablet) device owners.
More than 100 digital shopping resources—from clubs like BJ’s to mass outlets like Walmart and pure play companies like Overstock—were part of our tracking and analysis. Overall, Amazon Prime members made far more visits and spent significantly more time using digital shopping resources than did non-Prime members. Total visits were roughly 50 more per shopper than non-members and time spent by Prime members exceeded that of non-members by about six hours per person during the five-month period.
It turns out that Prime members visit Amazon.com twice as often as non-Prime members. And while Amazon is the most frequent shopping touchpoint even among non-Prime members, there is a distinct difference in their preferences for apps versus mobile websites. During the five-month period, 91% of Amazon Prime members engaged with Amazon via its mobile site, compared with 77% of non-Prime shoppers. Just 55% of Prime members and 30% of non-members used the Amazon app. But despite this disparity, apps drove more repeat usage of, and longer engagement with, online shopping venues than mobile sites. And both Prime and non-Prime consumers showed a willingness to explore retail app options in categories like Pure Play and Mass.
Prime members demonstrated an inclination towards online shopping, visiting “pure play” outlets (retailers that only sell online) twice as often as non-Prime members and being more likely to access grocery sellers online.
One area where Prime and non-prime members were pretty much in sync is in their use of coupons and deals. Their top choices were Groupon (32% of Prime members, 32% of non-Prime), RetailMeNot (20% and 16%), Coupons.com (17% and 19%), Ebates (10% and 8%) and Ibotta (8% and 9%).
The behavior of Prime members during November and December is particularly noteworthy because they started shopping earlier than non-members and spent more minutes per week doing so. Prime members’ shopping activity at places other than Amazon spiked upward in the first week of November, reaching a peak at the end of the month. Prime members did not show an increase in weekly shopping minutes on Amazon until the week of Thanksgiving when deals are traditionally offered.
When it comes to the use of search engines before visiting Amazon.com, Prime members are more likely to use brand terms (47%) than non-Prime members (35%), while non-Prime members search for products (29% to 19% for members).
Here are some key takeaways from our analysis:
- Don’t shy away from Amazon Prime members. They’re very active at all sorts of online retail options and are open to various online shopping experiences.
- Elevate your app experience because it’s a great way to generate deeper and longer engagement.
- Search is an opportunity for both brands and retailers to engage online shoppers as most pre-Amazon searches contain a brand or product name
- Start holiday deals early. Prime members are in the forefront of seeking out the best merchandise and deals.
GfK SE, based in Germany, specializes in market and user experience research.