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Jul 16, 2019

Searches for 'cancelling Amazon Prime' spike on Prime Day

Amanda Lang: Don't lose your head over Prime Day deals


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Internet searches for “Cancelling Amazon Prime” were 18 times higher on Monday -- the beginning of Inc.’s (AMZN.O) two-day sale -- than the previous day, according to search engine monitoring firm Captify. The data suggest shoppers want to snatch up discounted gadgets and appliances without making a long-term commitment to the world’s biggest online retailer.

“If Amazon is hoping to use Prime Day as a way to sign up and retain new Prime members, they might need to rethink their retention plan,” Captify said in a statement. “According to search, consumers are signing up for Prime, getting their deals and then cancelling membership shortly after.”

Shoppers are projected to spend US$5.8 billion on Amazon over the two days, according to an estimate from Coresight Research. The e-commerce giant launched Prime Day in 2015 as a way to lure new Prime members, who pay fees in exchange for shipping discounts and other perks like video streaming.

Analysts estimate Amazon’s Prime member retention rate is more than 90 per cent, better than Costco Wholesale Corp. The Seattle-based company has used a variety of tactics to try to find additional subscribers. For example, Amazon offers monthly memberships to attract those who don’t want to join for a year.

The average Prime member spends US$1,400 a year on Amazon, more than double the US$600 spent by shoppers who aren’t Prime members, according to Consumer Intelligence Research Partners. The firm estimates Amazon has 103 million Prime members in the U.S.

Captify based its estimate on searches by 2.2 billion global consumers using computers, voice-activated devices and smartphone apps.