Federal Reserve Chair Jerome Powell has made good on his promise to burst the COVID induced e-commerce bubble. After continuous rate hikes, the consumer is finally starting to feel the pinch. Separately “Big Tech” is in the process of shedding the layers of fat they accumulated during the “Great Lockdown”. You didn’t have to look further than Amazon’s 3rd quarter earnings to learn: the recession is already here.
However, our data, shows that relative to other retailers Amazon is in a better position to weather the storm, thanks to Prime. Not only is the Amazon Prime customer base expected to expand within the next six months – with 20% of non-subscribers considering the service, current subscribers are not churning and are willing to tough out the recent price increase.
Demographics are also on their side – a closer look shows that Amazon Prime users are in fact the best customer demographic: young, affluent, and most importantly, brand loyal.
Bottom line, this winter stay inside and surround yourself with family and friends. It might just warm your heart when you watch them shop for the holidays. Odds are they’ll be using those Prime subscriptions as much as possible.
Customer satisfaction ranks highest amongst all subscription services we track
90% of 30-44 year olds earning $100k+ are subscribers!
Usage is high
Subscribers value the Prime bundle
Despite a price increase to $139/year chances of churn are low
Amazon can raise price to $159/year without substantially increasing churn
While Prime is 60% penetrated overall, 1 in 5 non-subscribers are looking to join