Amazon Prime membership could rise to over £90 a year predicts ParcelHero
Amazon’s UK revenue jumped over 20% last year. But that won’t halt a rise of at least 17% in the cost of Prime membership, if it follows the lead of Amazon US, says the home delivery expert ParcelHero.
Even though Amazon has just announced record sales of £23.6bn here in the UK, it’s unlikely that will stop a rise in Prime membership fees of around 17%, forecasts the home delivery expert ParcelHero.
ParcelHero’s Head of Consumer Research, David Jinks says: “Amazon had a bumper year in the UK, with sales jumping from £19.6bn in 2020 to £23.6bn in 2021. Some online retailers saw their income fall as non-essential store closures ended last spring and shoppers returned to the High Street, but Amazon has more than held its own.
“In its Christmas quarter, Amazon also posted a 9% rise in global net sales of $137.4bn (£101.1bn). However, that hasn’t stopped it from bumping up its subscription fee for American customers by 17%, taking it from $119 (£88) to £139 (£103).
“Although not imminent, we’d be surprised if Amazon didn’t follow suit here in the UK, given the current increase in fuel and energy costs. A similar 17% rise in its UK membership fee would take it from £79 to £92. That’s quite a jump, but probably not enough to result in mass cancellations.”
Amazon UK currently has around 15 million subscribers. For the current, £79 fee they get:
- Free deliveries on most items and Unlimited One-Day Delivery, Same-Day Delivery, and 2-Hour Delivery
- Prime video, the streaming channel
- Same-day grocery delivery in many urban areas, via Amazon Fresh and Morrisons
- Amazon Music (a music streaming service like Spotify)
- Other perks including access to Amazon Prime Day deals
An Amazon UK spokesman said this week: “The price change only applies to the US. We keep this under constant review, but have nothing to announce at this time.” However, we the phrase “at this time” could signify that a 17% to 25% membership hike is on the cards.
Concludes David Jinks:
“Our top tip for anyone thinking of joining the 53% of UK households who are already Prime members, is to sign up within the next few months to beat any potential rise.”
“Several other UK stores also offer free deliveries for a one-off fee, but they cannot match the many other perks that Prime membership offers.”
To discover more about how retailers can adapt their existing infrastructure to meet changing customer expectations, see ParcelHero’s study at: https://www.parcelhero.