This week, Amazon went after Walmart by offering low-income shoppers a steep discount on Prime memberships. But just how important is that demographic to Amazon?
For the wealthiest Americans, Amazon Prime has become the norm
Amazon’s new discounted Prime for lower-income consumers could add new subscribers.
Rani Molla was a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.
Amazon Prime membership is lowest among households that make less than $41,000 per year, according to a survey earlier this year by investment bank Piper Jaffray. That means Amazon has the most room to grow among lower-income consumers.
Households that made more than $112,000 per year, on the other hand, are nearing saturation, with 82 percent in possession of Amazon Prime memberships, according to a survey of 5,500 U.S. teens about whether their families had Prime memberships. The insight comes from a ongoing Jaffray survey on what brands teens consume and what trends teens follow. It bases income on average household income for each teen’s zip code.
Overall, approximately 60 percent of households in the U.S. have Amazon Prime memberships — and that’s growing across demographics.
The markdown on Amazon Prime’s monthly fee is a bid to court customers who might not be able to afford the subscription and would otherwise shop at Walmart or other retailers.
This article originally appeared on Recode.net.
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