Amazon Prime accounts for half of all holiday sales, grows 38%

By

Cassidy Mantor

Published
Jan 2, 2018

Amazon Prime sales accounted for half of all holiday sales during 2017. The service showed 38% growth over last year, outpacing total e-commerce retail sales which grew 18% for the season, according to data published by GBH Insights.

Amazon.com Inc also announced on Tuesday that it had shipped over 5 billion items worldwide via its subscription based Prime service in 2017 while adding more new members than ever before.

According to data released by GBH Insights, Amazon Prime accounted for between 45% and 50% of all online holiday sales this past season. Subscribers spent an average of 22% more than they did last year. 

GBH Insights head of technology research Daniel Ives called Amazon Prime the “golden jewel of the Bezos empire." The research company's data estimates there are 88 million Prime accounts.

GBH Insights analyzed Amazon's holiday performance in comparison to Walmart, Target and Best Buy. It found the prices and inventory offered to Prime members functioned like a "ring-fence" around Prime subscribers that "significantly benefited the company in a fiercely competitive pricing environment."

Ives explained, "While [Walmart] is emerging as Amazon’s biggest sole competitor online, we believe customer overlap remains small today as Prime membership growth and Amazon’s ‘stronghold on e-commerce’ remain hard to penetrate as we expect this trend to play out in the near-term heading into 2018."

The data supports GBH Insights' note, with the company reporting 4 million new Prime subscribers per week.

Top selling items on Prime across all categories were Amazon's Echo Dot and Fire TV Stick. GBH Insights expects to see Amazon continue to grow its Echo product line, Alexa, and see more Whole Foods integration. Amazon Web Services cloud product may temporarily depress margins because it is seen as a long term investment.

Amazon's own announcement of its Prime shipment numbers on Tuesday is a first for the e-commerce giant, which did not give comparable full-year shipment number for 2016.

Amazon Prime, which offers its users services like free two-day shipping for certain purchases, unlimited streaming of movies and TV shows with Prime Video, has been attracting more subscribers every year.
The company said it shipped over 1 billion items worldwide via Prime during holiday season in 2016.

Amazon Prime, which entered countries including Mexico, Netherlands, Luxembourg and Singapore last year, now is present in 16 countries around the world.

Shares of the Seattle, Washington based company were up 1.5 percent at $1,187 in afternoon trading.  Marketwatch reports Amazon stock is up 53.5% over last year. Other retailers whose stock showed growth from increased holiday sales include JCPenney, Walmart, and Kohl's.

With additional reporting from Reuters.