Amazon’s Prime program has vastly expanded its features over the years – adding streaming media, discounts at Whole Foods, and a recently announced free year of Grubhub+/Seamless+.  Will tying in with other loyalty programs provide a boost to subscriptions?  In today’s Insight Flash, we examine cross-shopper behavior to assess the desirability of the partnership, as well as looking at retention for Grubhub+ and whether new Prime subscribers have been slowing.

An analysis of cross-shopping indicates that there is some value to a tie-up between the two companies.  Grubhub customers spend 21% more on Amazon.com than the overall population, and Amazon.com shoppers spend 8% more on Grubhub orders.  Given a customer base that already has a predilection to higher spend on both sites, providing additional incentive for cross-shoppers to deepen relationships with both companies via shared loyalty program benefits will likely increase spend among this group.

Cross-Shop

Note: 91 days ended 7/3/22; Amazon.com spend only for items in Amazon inventory, not those sold by third-party merchants

Grubhub+ has had trouble getting shoppers to stick with the program on its own.  Over the last two years, only about 75% of customers who subscribed to the program stayed with it one month later, dropping to about 45% after six months.  Among those who first joined in July 2020 to June 2021, only a third were still paying for Grubhub+ a year later and only 15% two years later.  Even among the most loyal group of early adopters who were subscribed to the program at the beginning of our July 2019 cohort panel history or made their first transaction in the following year, only about 30% were subscribed two years after signing up.

Grubhub+ Retention

Note:  Among those whose first transaction was in period listed in legend, % still paying for subscription listed number of months later; July 2019 “first” transaction includes shoppers who may have shopped prior to beginning of tracked period

Amazon could also benefit from an incentive for new users to join the saturated Prime program.  Although the company does see a bump in new accounts during the rush of last minute Christmas shopping, more recently new subscriber levels have been a third of what they were two years ago and a fifth of what they were in 2019.  The last two Prime Days, Amazon’s discount day for loyalty program users only, do not appear to have led to more Prime subscribers.  Since Amazon usually offers the first month free, whether last week’s Prime Day had any impact may take up to a month to see, but it is more likely that any boost in Prime payments would be due to the Grubhub+ offer.

New Amazon Prime Subscriptions

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