Amazon said it attracted a record number of new Prime customers and trials this holiday season. More than 5 million people signed up new Prime memberships or free trials in a single week this holiday season, the company announced in a holiday recap Thursday. Fast shipping options likely helped spur that growth.
Why we care
Amazon has invested hundreds of millions (if not over a billion) in Prime Free one-day and same-day delivery. Analysts expect Amazon’s free one-day shipping investments to pay off. Prime members tend to become loyal Amazon shoppers, spending more annually than non-members.
In August, RBC analyst Mark Mahaney estimated that free one-day shipping would spur Prime membership growth and Prime purchases overall, projecting an eventual annual revenue bump of $24 billion. A Piper Jaffray survey this month found that 55% of U.S. Prime members said they will use Amazon more when numerous items are included within one-day shipping.
Customarily light on specifics, Amazon said holiday orders with one- and same-day delivery nearly quadrupled compared to the same period last year. The company also noted Thursday that more than 100 million items sold by independent third-party sellers were shipped via Prime Free one-day delivery in the U.S. during the holidays.
More on the news
- Amazon has also been building out a network of delivery hubs where packages can be delivered to secure lockers, piggybacking on existing retailer locations. Deliveries to those pickup points increased by more than 60% compared to a year ago, the company said.
- Amazon, Walmart, Costco and Target led the way in making Super Saturday (December 21 this year) the best U.S. retail day ever, Customer Growth Partners told CNN.
- Department stores, which have been hit hard as Amazon’s grown, saw overall sales decline 1.8 percent and online sales growth of 6.9 percent, Mastercard reported. That compares to overall online sales growth of 18.8% this season, a record, according to Mastercard.