Is Amazon Prime Losing Customers?

Prime Is Still Growing, But Slower

Amazon Prime remains one of the most successful subscription programs in history, with over 200 million members worldwide. However, the explosive growth of the 2010s has given way to more modest gains. In the United States, where Prime is most deeply penetrated, estimates suggest that over 75% of households have at least one Prime member, leaving limited room for expansion.

Several factors contribute to the growth deceleration. Price increases on Prime memberships have made some households reconsider, particularly in an inflationary environment. The benefit bundle, while still strong, faces more direct competition than ever before. And while Amazon continues to add new perks, the marginal utility of each additional benefit diminishes as the core promise of fast, free shipping becomes table stakes across e-commerce.

Importantly, Prime is still adding net new members, and retention among long-term subscribers remains high. The story is not one of decline but of maturation. Amazon's focus has shifted from acquiring members at any cost to maximizing revenue per existing member through higher prices and deeper integration with services like Prime Video, Amazon Music, and Grubhub+.

Competition from Walmart+ and Temu

The competitive landscape for subscription shopping has intensified considerably. Walmart+ has emerged as Amazon's most direct challenger, offering free shipping, grocery delivery from 4,700+ stores, and a streaming partnership with Paramount+ at a price slightly below Prime's. Walmart's advantage in grocery, where it is already the US market leader, gives it a differentiated value proposition that Prime struggles to match in many markets.

Temu represents a different kind of threat. While not a subscription service, Temu's ultra-low-price model has captured significant consumer attention and spending, particularly among budget-conscious shoppers. Temu's rapid growth has forced Amazon to respond with lower-price storefronts and more aggressive pricing. The key difference is that Temu competes on price while Prime competes on speed, convenience, and ecosystem integration. Both can coexist, but Temu's rise has certainly captured some consumer wallet share that might otherwise go to Amazon.

Other competitors like Target Circle 360, Kroger Boost, and Shopify Shop app are also carving out niches, further fragmenting the subscription loyalty space. Prime still dominates, but it no longer has the field to itself.

Impact on Sellers: Higher PPC Costs, Need for Better Conversion

For sellers, slower Prime growth and increased competition translate into concrete operational challenges.

Higher PPC costs. As the pool of Prime members grows more slowly, competition for their attention intensifies. More sellers chasing similar keywords means higher cost-per-click and lower return on ad spend. The days of cheap Amazon traffic are over for most categories.

More demanding customers. Prime members have been conditioned to expect fast, free shipping and seamless returns. As Amazon tightens fulfillment requirements and storage fees, sellers absorb higher costs while customer expectations remain elevated.

Need for differentiation. When the platform's growth was rapid, almost any decent product could find buyers through a combination of competitive pricing and aggressive PPC. In a slower-growth environment, listings that do not stand out are increasingly invisible. Conversion rate optimization, high-quality imagery, professional product video, and compelling A+ Content are no longer nice-to-have, they are essential for survival.

Subscription fatigue. As consumers add Walmart+, Target Circle 360, and various direct-to-consumer subscriptions, some may let their Prime membership lapse temporarily or permanently. Sellers who have not built brand recognition outside of Amazon are disproportionately affected when customers leave the platform.

How Video Content Gives You an Edge

In a marketplace where Prime growth is slowing, competition is rising, and customer attention is fragmented, video content is one of the few levers that directly improves both conversion rates and brand differentiation simultaneously.

Higher conversion rates. Listings with professional video content consistently outperform those without. Video helps customers understand your product in ways that static images cannot, reducing purchase anxiety and increasing confidence. The result is higher conversion rates from the same amount of traffic, which is critical when traffic is becoming more expensive.

Brand differentiation. As more sellers compete on Amazon, the ones with professional, polished product videos look more credible and trustworthy. Video signals that you are a serious brand, not a fly-by-night reseller. This differentiation is especially important in categories where many sellers offer similar products.

Multi-channel leverage. A single product video can serve across Amazon, Walmart, your own website, social media, and email marketing. This amortizes the cost across multiple channels and reduces your dependence on any single platform. If Amazon's growth continues to slow, you are already positioned to reach customers elsewhere.

Social proof amplification. Product videos that demonstrate real use cases function as powerful social proof. When shared on social media, they build brand awareness and drive external traffic back to your listings, reducing reliance on paid advertising.

VEONIB makes this accessible by letting you generate professional product videos from a simple URL. In about 60 seconds, you can create video content that previously would have required a studio, a videographer, and days of editing. This means sellers of any size can now leverage video as a competitive differentiator without the traditional barriers of cost and expertise.

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