More Shoppers Paying for Both Costco, Amazon Memberships
Fifty-seven percent of consumers now pay both to shop at Costco and to receive free shipping for items ordered via Amazon Prime, up from 13 percent in 2013, according to a survey of 2,500 consumers conducted last year for New York- and Los-Angeles-based research company MoffettNathanson.
“Over those five years, as membership overlap exploded, Costco has shown steady revenue and membership growth,” MoffettNathanson analysts observed in a research note quoted in The Seattle Times. “Americans appear to be buying into the concept of owning two ‘shopping’ memberships, as the value proposition is fundamentally different.”
The researchers estimated that 80 million people in the United States and Canada had access to Amazon Prime in 2017, 62 million were Costco cardholders, 64 million had Sam’s Club memberships, and 15 million belonged to BJ’s Wholesale Club.
MoffettNathanson further found that more current Costco and Amazon Prime members plan to renew than did in 2016. While at Costco, that was true at all income levels, and for people age 35 and older, but fewer Amazon Prime members with incomes under $45,000 a year said they intended to renew their memberships in 2017 than did in 2016, although the renewal intention rate for this group remained north of 90 percent.
For both retailers, renewal intention decreased from 2016 to 2017 for Millennials. The declines were small, however, with most people age 18 to 34 saying they still planned to renew.
“Maybe Millennials are just less loyal than their parents when it comes to retailers, or perhaps more of them joined on a limited-trial basis,” the MoffettNathanson analysts speculated. “It’s a trend that we haven’t seen in our surveys before, so worth watching, especially as the stickiness of membership is such a critical attribute of the model.”