US Amazon Prime growth is on a two-quarter rebound (AMZN)

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Prime membership in the US hit 103 million as of March 31, 2019, according to estimates from Consumer Intelligence Research Partners (CIRP).

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This represents 11% year-over-year (YoY) growth, a slight acceleration from the 10% YoY membership increase seen in Q4 2018. It also marks the second straight quarter of acceleration the service has seen since hitting 8% YoY in Q4 2018, the lowest growth rate Prime had seen since CIRP began tracking membership in 2012.

Here’s what it means: The addressable market for Prime membership in the US is shrinking, but Amazon seems to be finding ways to drive sign-ups anyway.

The introduction of Prime’s new scheduled delivery perk, Amazon Day, is an excellent example of a benefit that makes Prime appealing for more consumers.Using Amazon Day, members can pick a day to receive all of their orders for the week on, provided they were placed at least two days beforehand.

Originally launched in November on an invitation-only basis, this program was rolled out to all US Prime members at the end of February, according to TechCrunch. This benefit could make a huge difference to consumers who are concerned about their packages getting stolen or who are only available to take deliveries on certain days.

Adding features — like Amazon Day — that remove barriers to entry for consumers may be Amazon’s best bet for keeping US Prime membership on the upswing in the future.

The bigger picture: Accelerating US Prime growth is a good sign, but conversions from 30-day trial memberships are sinking.

As membership hits new heights, falling 30-day trial conversion suggests that long-term acceleration may be tough to maintain. Prime’s 30-day free trial is one of Amazon’s best strategic offerings to get new sign-ups. It shows prospective members the wide range of benefits offered through the subscription program and will automatically convert them to a paid membership if they don’t cancel after 30 days.

However, Prime’s retention rate following this trial has slipped from a high of 75% in Q3 2017 to 64% in Q1 2019, per CIRP. This may mean that Amazon has already pulled in the consumers who get the most out of Prime memberships and are likely to stay subscribed in the long term. If this is the case, it would mean that Prime is close to saturation in the US and that its growth could flatten out or even decelerate in the near future.

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Source: Business Insider – feedback@businessinsider.com (Gregory Magana)