In the past year, what has been the renewal rate of Amazon’s monthly subscription Prime members?

Renewal rate of Amazon's monthly subscription Prime members in the past year?

BusinessDialogue learned that on May 31st, the latest data released by consumer research platform CIRP showed that in the past year, 23% of Amazon’s monthly Prime members cancelled their subscriptions, of which 41% used the service for less than 6 months. Nevertheless, this is an expected result for Amazon.

CIRP’s analysis is based on a sample of 2,000 consumers who purchased Amazon products within the 90 days prior to the survey. No margin of error was given for this small sample.

The study pointed out that among the Prime members who cancelled their monthly subscription in the past year, 35% subscribed for 10-12 months, the highest proportion; 17% subscribed for 7-9 months; 22% subscribed for 2-3 months; 19% subscribed for 4-6 months. A small percentage subscribed for more than 12 months or less than 2 months.

In its latest report, CIRP stated that although monthly subscriptions are frequently interrupted, over 77% of monthly subscribers still continue to use this service. Moreover, a considerable number of people who cancelled their subscription in the past year had subscribed for more than 7 months.

The loss of monthly subscribers has a minimal impact on Amazon. According to Amazon spokesperson Sarah Lasky, Amazon has over 200 million members globally, and according to Statista, there are 167.2 million members in the United States alone. As of March this year, the majority of Amazon buyers (73%) reported that they were Prime members, while 17% said they had never joined.

CIRP estimates that since its launch in December 2016, monthly subscribers are expected to account for more than half of Amazon’s total membership.

In addition, compared to annual members, the monthly membership fee is higher, and Amazon can earn higher subscription revenue from monthly members. BusinessDialogue understands that in February 2022, Amazon’s monthly and annual membership fees were raised for the first time in four years, with the monthly fee increasing from $12.99 to $14.99, and the cost for a yearly subscription being $179.88 for monthly subscribers and $139 for annual members.

Therefore, many monthly subscribers will cancel midway, either switching to annual subscriptions or simply not using them. Amazon has also considered a certain proportion of monthly subscribers loss in the model, including monthly users who subscribed to Prime membership specifically for holiday promotions.

Editor ✎ Ashley/AMZ123

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