Amazon Prime Members May Spend More Than Double What Non-Members Do
Prime costs $99 a year and gives customers free, two-day shipping on millions of items, as well as access to of thousands of free TV shows, movies, music, and books and unlimited cloud storage for photos.
A oft-quoted 2014 study from RBC Capital showed that Prime members spend nearly twice as much on Amazon as non-Prime members do, but CIRP has upped the ante. After surveying 500 Amazon shoppers, analysts concluded Prime members spend more than double what non-members do.
"Amazon Prime now has 40 million US members, spending on average about $1,500 per year, compared to about $625 per year for non-members," the report reads.
The study also found 39% of Amazon customers own a Kindle tablet or e-reader, 7% own a Kindle Fire TV box or stick, and less than 1% own an Amazon Fire smartphone.
"Similar to Amazon Prime members, Amazon Kindle owners are better customers," says Mike Levin, Partner and Co-Founder of CIRP. "They also shop more frequently, and also buy more expensive items on average. It is too early to measure the purchasing propensity of Amazon Fire TV owners, and at this point there are far too few Amazon Fire phone owners to matter."
Amazon has spent the last year amping up its digital offerings for Amazon Prime, including spending more than $100 million on original video content exclusive to Prime members. Amazon wants to beef up Prime's offerings specifically because of figures like the one from CIRP: The company banks on the fact that when it hooks people into its Prime ecosystem, it will make more money from their increased shopping.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.