Amazon Prime’s loyalty is almost as sticky as Costco

Data from Caddle also shows how much business automatic "Subscribe & Save" deliveries could take from other retailers.

amazon-prime-shoppingCustomer loyalty to Amazon Prime is nipping at the heels of Costco, long considered an industry standard when it comes to paid retail memberships.

That’s according to the latest data from mobile insights platform Caddle, which surveyed 3,859 Amazon Prime users to profile what its shoppers look like in Canada.

The poll showed that 84% of users were likely to renew their membership – not far behind the 91% of Costco members who said they were likely to renew in a separate poll of 1,282 of the retailer’s customers.

Ransom Hawley, founder and CEO at Caddle, admits he thought it would be a landslide for Costco, which has been on Canadians’ radar for 35 years, compared with only seven for Prime. The fact that Prime has gotten to 84% at a similar price point, Hawley says, reveals what he describes as “endless opportunity” for brands.

In a survey of 8,687 respondents on Caddle’s broader active user panel, 44% reported being Prime members, while about 25% are non-members, but who use someone else’s account for deliveries.

Hawley says that Canadians who have not signed up to Amazon Prime may do so soon, weighing convenience against price. But Prime’s “Subscribe & Save” option might provide enough extra value to give it the potential to explode – possibly at the expense of both Walmart and traditional grocery.

“Subscribe & Save” is a service that allows Amazon Prime users to sign up for regular deliveries of certain goods – like cleaners, personal care products and pet food – and receive a discount when getting five or more products in each “auto delivery.”

Caddle asked 577 people who began using “Subscribe & Save” in the last year, as well as 131 users who were members for longer than 12 months, where they had previously bought the products they now automatically receive from Amazon. For 65% of old members and 51% of new users, it was from Walmart. For 42% of old members and 38% of new members, it was from grocery, with 37% of old members and 18% of new getting them from Costco.

caddle-data

Among new members, health and wellness products were the most common point of entry to “Subscribe & Save” (31%), followed by pet items (26.5%) and paper towel and toilet paper (7.5%).

Hawley adds that this data shows there could be heavy implications if the Amazon Fresh grocery service were to come to Canada, though he cautions that the dataset is very preliminary and it’s a bit premature as to whether such trends will continue. However, he says it’s interesting to see who will own the membership category, and whether shaving products, deodorants, or other CPG staples, will become more prominent.

“Getting ahead of this is going to be critically important,” Hawley says.