« Back to home

Amazon.com Retail Trends

Posted on

With its surging stock, Amazon.com (the company) seems to be in every business imaginable: hardware, video streaming, audiobooks, magazine subscriptions, grocery delivery and computer server infrastructure, just to name a few.
Still, the amazon.com e-commerce website is still what most people know it for.
For this post, we used the TXN consumer spending insights app to find some recent trends in Amazon shopping patterns.

Key Observations

  • Prime membership has eclipsed 50% penetration in Amazon's customer base and keeps growing
  • Amazon's 3rd-party seller marketplace has seen 45% growth in the last 2 years and now accounts for 60% of all Amazon retail spend

Prime on the Rise

Membership in Amazon Prime, providing free two-day and one-day shipping, as well as a slew of other perks, has been on a steady rise over the past 24 months:

We see that Prime sign-ups peak during the holiday shopping season: since Amazon Prime membership is free for the first 30 days, we see sign-ups start to increase in December and peak in January.

Overall, Prime members account for just over 50% of Amazon shoppers in the past 24 months:

Non-members Are Just as Valuable

Despite the strong push to sign up as many Prime members as possible, Amazon is actually doing very well with non-members as well. Monthly spend per customer for items sold directly by Amazon is almost indistinguishable between Prime members and the average customer:

For Amazon's 3rd-party marketplace, the gap in monthly spend per customer between Prime members and all customers has shrunk since the start of the year:

Counting all perks, Amazon Prime membership is a great deal, but Amazon never leaves any customer unattended; with initiatives like free shipping for any order over $25, Amazon is doing nearly as much business with the average customer as it does with Prime members.

Thriving 3rd-party Marketplace

Speaking of Amazon's marketplace, the volume of sales by 3rd-party sellers on Amazon.com is meaningfully larger than sales directly by Amazon itself, and growing. The comparison of purchase frequency, as expressed by transactions per customer is consistent:

While average purchase amount (pictured) and monthly spend per customer via the 3rd-party marketplace both continue to increase:

Perhaps this is due to the constant expansion of the 3rd-party product catalog, enabling consumers to spend ever more with this seemingly endless list of external sellers.

The sum of all of these changes is that the share of spend going to 3rd-party marketplace purchases continues to increase for Amazon, accounting for over 60% of Amazon retail spend:

At first glance, this may seem like a negative trend for Amazon: isn't it better to sell your own products than someone else's? However, with 45.2% growth of Amazon Marketplace in the last 2 years...

...we realize that this spend took place completely within Amazon's walls, yielding invaluable business intelligence and customer relationships to Amazon, instead of happening on independent retail websites outside of its all-seeing eye.

In summary, despite next-level moves in seemingly every other industry, Amazon continues to dominate good, old-fashioned e-commerce.

Learn more about consumer spending analytics with TXN.