In what has become something of a tradition, Amazon.com (NASDAQ: AMZN) released certain data about the outcome of its sales this holiday season. The company has historically kept most detailed metrics about its results close to the vest, but it shares intriguing tidbits that provide insight into consumer buying patterns.
This year was no different. Without providing much context, Amazon did provide a number of bold claims about its just-completed Christmas season. Here are a few of the most telling.
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1. Voice-controlled shopping exploded
Amazon customers continued to adopt Alexa for voice-activated purchases. In addition to Amazon’s growing line of Echo smart speakers, a cadre of third-party Alexa-endowed devices allow customers to shop using voice controls.
Without providing context, Amazon said “use of Alexa for shopping more than tripled” during this year’s sales compared with the same time last year, according to the company press release. This announcement comes on the heels of a recent revelation that “millions of Prime members” used Alexa for voice shopping. This lucrative tie-in should continue to serve Amazon for years to come.
2. Customers continue to flock to Prime
The lure of free two-day or faster shipping continued to entice additional shoppers to sign up for Prime, Amazon’s customer loyalty program. While membership runs $119 per year, Amazon offers a 30-day free trial that attends to attract a lot of attention — particularly during the Christmas season.
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Amazon said that “tens of millions” of shoppers worldwide took advantage of the free trials or began a paid membership with Prime. The company also revealed that “more than 1 billion items” shipped from free this season with Prime. In a separate announcement, Amazon said that “more than 4 million people trialed Prime” in one week alone during the holidays.
3. Prime members continue to shop at record levels
“More than 1 billion items were shipped for free in the U.S. alone” to Prime subscribers, according to Amazon. The company has never divulged details about its Prime roles, other than to say memberships surpassed 100 million in early 2018.
Estimates about memberships vary widely. In early 2018, Cowen and Company analyst John Blackledge estimated that 54% of U.S. households subscribed to Prime, or about 60 million members. That number might be conservative. Amazon Prime may have as many as 97 million U.S. members, according to research from Consumer Intelligence Research Partners.
Using those U.S. membership estimates as guides, the average U.S Prime member may have purchased between 10 and 17 items during the holiday season alone. It makes sense that subscribers would want to maximize the value of their membership by making multiple purchases, not just during the holiday’s, but throughout the year.
4. The partnership with Apple is booming
In early November, Amazon announced that it would expand its selection of Apple (NASDAQ: AAPL) products, while providing customers with the latest devices. The company also revealed that only authorized resellers will now be allowed to sell Apple and Beats products on Amazon’s marketplace. In a sign of the closer ties, Amazon Echo smart speakers recently began supporting Apple Music.
The alliance is already bearing fruit. Amazon said the 32 GB Wi-Fi version of Apple’s iPad in Space Gray was among the “best-selling electronic devices this holiday season,” joining the Bose QuietComfort 35 (Series II) Wireless Headphones and the Samsung Flat 65-inch 4K UHD 8 Series Smart LED TV, among others. This collaboration may ultimately be a boon to both Amazon and Apple.
5. Amazon devices are still tops
The company said customers purchased “millions more Amazon devices this holiday season” over the same time last year, which has become something of a recurring theme during the company’s Christmastime sales and its Prime Day member shopping event, with happens in July.
Among the biggest sellers were the latest version of the Echo Dot, the 4K Fire TV stick with Alexa remote, and its flagship Echo smart speaker. The company also said it was a record season for Amazon’s Kids Edition products, selling more Echo Dot Kids Edition and Fire Kids Edition tablets than ever before.
The business impact
The stock has taken a hit in recent months, down 28% from its recent highs, the result of a rare revenue miss, weaker-than-expected guidance, and the overall market decline. These issues belie the company’s surging profitability and continued record results.
The common theme among these takeaways is that Amazon is selling more items to more customers than ever before. Long-term investors should stay focused on the bigger picture and the massive opportunity still ahead.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena owns shares of Amazon and Apple. The Motley Fool owns shares of and recommends Amazon and Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
