Consumers Still Love Amazon Prime Despite Price Hike

Consumers Still Love Amazon Prime Despite Price Hike

How much of an impact has Amazon's annual Prime membership increase really had on consumers? Not that much, according to a recent survey by AlixPartners, which polled 1,124 US internet users in July.  

Amazon announced in April that it was raising the price of its Prime subscription by roughly 20% to $119 per year. The ecommerce giant last bumped up the price in 2014. 

More than half of the respondents in the AlixPartners survey said the change hasn't impacted their subscription at all. Most interestingly, nearly a quarter weren't even aware there was a price change. 

Overall, few were deterred by it—just 9% said they plan to cancel their plan, while another 6% said they've already done so. And for a few others (8%), the new cost of the membership was a reason they chose not to join. 

We expect the number of Amazon Prime households in the US will total 56.4 million this year, or 45.5% of all households. When looking at Amazon Prime users—those who aren't necessarily the account holder—the number will reach 105.2 million. We estimate the number of Prime households will increase by 7.8% in 2019, though these figures were calculated in February, before the announced price hike.

What's more, Amazon will drive 80% of ecommerce growth this year, according to eMarketer's latest forecast. Total US Amazon retail ecommerce sales (gross merchandise value) are expected to hit $258.22 billion in 2018, up 29% over 2017—far exceeding total US retail ecommerce’s growth of 16%. 

eMarketer PRO subscribers can read more about the ecommerce giant's efforts, as well as what marketers need to know about the upcoming Amazon Prime Day in our newly released report "Amazon Prime Day 2018." 

Not sure if your company is a PRO subscriber? Check here

And check back in the coming weeks for more coverage on Amazon, featuring our latest estimates. 

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