Rising Prices May Lead 1 In 3 Amazon Prime Members to Cancel Their Subscriptions

In recent news, Amazon announced it will be raising the price of its Prime membership this quarter, from $119 to $139 per year and from $13 to $15 per month. Prime now claims more than 150 million members in the U.S. alone, following a stint of incredible growth over the course of the pandemic. 

Are its lightning-fast delivery, Prime Video, and other features enough to keep current members from abandoning the service after the price hike takes effect? While some experts are banking on Amazon’s past successes with raising Prime rates, recent survey results suggest that today’s inflationary pressures may cause significant disruption to the program’s subscriber base. 

Surveying more than 2,900 U.S. adults, CivicScience finds that nearly 60% of respondents are current Prime users (including users who are not primary account holders). Among Prime users, a whopping 30% say they are likely to cancel their membership due to the price increase, while close to 60% plan to continue subscribing to the service. 

Simply stated, nearly one-in-three Prime members say they are likely to cancel their subscription due to the coming price hike. 

Data further supports the importance that price plays for these households. Close to half of potential Prime cancelers say they have become more price-sensitive over the past 12 months, compared to 38% of continuing Prime members.

Churn is most likely to be felt among young adults. Nearly 40% of Gen Z and Millennial users say they may pull the plug on their subscriptions with the new prices.

Furthermore, a glimpse at favorability shows that over three-quarters of Prime members who plan to reconsider subscription report feeling negatively about Amazon in regards to the price increase, and half feel “very negative.”

Alternately, among the 40% of respondents who are not current Prime users, 9% express interest in subscribing to the service in the future, despite the price increase. 

At a time of rapidly changing consumer patterns and the emergence of competitive services such as Walmart Plus, the survey results suggest that Prime should focus on retaining its young, price-conscious subscribers in the months ahead.