Matt Lindner
Matt Lindner joined Mintel as Senior eCommerce Analyst after covering omnichannel retailing for a leading business publication.

The cost of an Amazon Prime membership is going up by 20% starting next month, but based on how popular the offering is with consumers, expect consumers to pay the extra fee with no hesitation.

Amazon announced on its Q1 2018 earnings call on Thursday that the cost of an annual Prime membership is going to increase from $99 to $119 for new members in May, with the price increase going into effect for existing customers’ whose membership is up for renewal starting in June. Given the fact that Amazon recently disclosed that it has 100 million members globally, this was a move undoubtedly made with the company’s bottom line in mind. The increase in fee will cause some Amazon Prime members to seriously examine just how much they are using their Prime membership. After all, there is undoubtedly a slight pause associated with paying $119 for something that used to cost $99.

Amazon Prime has been successful because it is one of the better offerings in the business in terms of the perks that it offers. Below are three reasons why an Amazon Prime membership increase won’t scare off (most) consumers:

75% of all consumers who shop online at least once a week live in a household that has an Amazon Prime membership.

1. Prime wins with heavy online shoppers

Mintel’s US research on online shopping shows that a third of all US consumers who shop online at least once a week live in a household that has an Amazon Prime membership, and more than three in five heavy online shoppers report doing more than half of their online shopping on Amazon. What’s more, nine in 10 of all consumers who have an Amazon Prime membership – who were surveyed before Amazon announced the $20 increase – said they planned on renewing their Prime membership. Dive deeper into the data and you’ll find that 95% of all heavy online shoppers who have a Prime membership reported that they were planning on renewing as well. In other words, a $20 increase is likely not going to be enough to break those consumers of their regular online shopping habits.

2. Prime’s integration with Whole Foods

Amazon has signaled that Prime is going to be a key component when integrating Whole Foods within the Amazon family. Amazon Prime will become part of Whole Foods’ rewards program this year. Amazon is continuing to expand the number of urban markets it serves with Whole Foods orders through its Prime Now two hour or less delivery offering, giving Prime members in those markets an expanded amount of products from which to choose on Amazon.

3. Prime members tend to have more disposable income

Consumers who have an Amazon Prime membership tend to have higher incomes, on average. According to Mintel research, the majority of those who have bought on Amazon in the past 12 months are likely to be Prime members; meanwhile, two-thirds of all consumers that have shopped on Amazon in the past year, and have a household income of $75,000 or more, have a Prime membership.

The increase in membership cost may not be a primary concern among users who find value in the service and will likely continue to see the benefits Prime offers, despite an extra $20 a year. Increasing the cost of a Prime membership is ultimately a win for Amazon because the company will be generating more revenue without totally alienating its most desirable customer base.