The latest report from Cowen & Co. shows that Prime memberships are increasing and tend to be popular with affluent shoppers.

Nearly half of all U.S. consumers live in a household where at least one consumer has an Amazon.com Inc. Prime membership.

Based on a survey of 2,500 U.S. shoppers in July, financial services firm Cowen & Co. estimates that Amazon.com Inc. has 54.2 million Prime members, up 17.1% from 46.3 million during the same time last year. 49.9% of those surveyed say they live in a house where someone has an Amazon Prime membership. Cowen estimates that figure will surpass 50% of all U.S. households by the end of this year.

Prime is Amazon’s loyalty program that offers benefits such as free expedited shipping and streaming video among other perks. Cowen’s data shows that Prime memberships are more common among younger shoppers as well as more affluent shoppers. 59% of all respondents ages 18-24 and 25-34 say they have a Prime membership, compared with just 37% of respondents over the age of 65.

There’s an even greater disparity among Prime memberships when it comes to income, according to Cowen’s data. Here’s a breakdown of the percentage of respondents that have a Prime membership by income bracket:

  • Above $150,000: 70%
  • $125,000-$149,999: 63%
  • $100,000-$124,999: 59%
  • $25,000-$39,999: 44%
  • Less than $25,000: 36%

Prime memberships also tend to be more popular among city dwellers (51%) and suburbanites (52%) compared with consumers who live in rural areas (41%).

advertisement

“We continue to view Amazon Prime as the most important driver of the retail business longer term,” Cowen writes. “The characteristics/behavior of Prime members underscores Prime’s importance.”

Part of the reason why Prime membership is important to Amazon is because Prime members tend to shop more frequently with Amazon. Cowen’s data estimates that 83% of U.S. Prime members bought at least once from Amazon in July. Furthermore, Prime members accounted for an estimated 61% of Amazon’s sales in July, compared with 39% non-Prime members.

Data from securities research firm Consumer Intelligence Research Partners last month estimated that Prime customers tend to spend nearly twice as much ($1,300) per year on Amazon than non-Prime members ($700). Amazon is No. 1 in the Internet Retailer 2017 Top 500.

Helping drive increased membership is Prime Day, Amazon’s annual sales holiday held for the past three years in mid-July.

“We expect rising Prime penetration in (the second half of 2017) driven by additional carryover from Prime Day in mid-July, back-to-school in August and the 2017 holiday season,” Cowen writes.

advertisement

An Internet Retailer survey conducted in conjunction with Bizrate Insights shows that roughly 53 million Americans bought something on Prime Day, which was held July 11, a Tuesday, this year.

Favorite