Amazon Struggles to Grow Prime Membership in U.S.
Amazon's all-important US Prime membership program has ground to a halt, according to new estimates from Consumer Intelligence Research Partners. This is the first time ever that the company has not seen annual Prime growth in its largest market. CIRP estimates that Prime members accounted for 73% of all Amazon transactions in the US in December 2022, up from the previous year's 66% penetration rate.
Amazon has been spending heavily on video streaming deals to try to attract new Prime subscribers, but CIRP's estimates suggest that these investments are not paying off. With more people returning to in-person shopping and the broader economic climate suffering, Amazon is now in a major cost-cutting mode.Amazon appears to be looking for growth in overseas markets instead.
In late 2021, the company moved the Prime program under Russell Grandinetti, SVP of its international business, indicating a greater focus on non-US regions. Despite Amazon's statement that Prime membership is still growing, the halt in US growth is a concerning sign for the company.