Consumer club memberships were once primarily the domain of warehouse retailers such as Costco and Sam’s Club or automobile associations such as AAA. However, over the last few decades, that fact has changed. With the boom in online shopping, more club memberships have also surfaced. From Amazon Prime to Walmart+, club memberships are now available to consumers from some of the biggest-known retail entities. Today, most consumers have at least one club membership. In fact, an estimated 200 million people belong to Amazon Prime, and 32 million subscribe to Walmart+.
The question is, how do club members shop compared to consumers who don’t hold memberships? Let’s take a closer look.
Who Are Club Members?
A variety of factors, including income and education levels, appears to influence whether consumers become club members.
For the most part, every club membership has its own mix of demographics when it comes to participants. The variances can be interesting. Here is a look at a few noteworthy findings from data over the last year:
- Sam’s Club members do the least amount of shopping online
- Costco and BJ Wholesale members are very similar to Sam’s Club members in almost every way
- Their memberships tend to match the overall demographics of club memberships, with just under 30 percent of their members being Gen X and about 36 percent being Baby Boomers
- Amazon Prime members are a relatively “middle of the road” group with a healthy mix of people from all demographics
- AAA has the largest percentage of baby boomers (over 50 percent), the most retirees, and the highest number of homeowners
- Walmart+ members do more online shopping, represent the biggest mix of both Gen Xers and Millennials, and about 80 percent own their first homes
Consumers with no memberships are more likely to be single. Additionally, more than half of this group has an income of less than $35k annually. More people in this group are also likely to have an education level of a high school diploma or less.
The demographics of different groups—both members and non-members—can drive such decisions as which brands to purchase or even which outlets to shop. Therefore, this information can be especially useful in making marketing decisions.
Do Club Memberships Influence What Consumers Buy?
Overall, non-membership holders shop for relatively the same products and product mixes that club members shop for, but with a few differences in buyer behaviors. Over the last year, for example, there have been some minor changes regarding what people buy or where they shop according to what club memberships they have. People who don’t hold club memberships are less likely to have made their purchase online than those who have memberships, especially if that membership is Amazon Prime or Walmart+. AAA members are more likely to buy home improvement products than people who have other memberships. Another example, Walmart+ members purchase more consumer electronics.
One striking fact from TraQline’s data on club membership is the sheer ubiquity of these warehouse club memberships. An average of 15 percent of consumers have no membership across all consumer durables purchases. One category where non-member purchases are higher than those of club member purchases is Cell Phones.
Members’ vs Non-Members’ Buyer Behaviors in a Specific Product Market
To really see how members differ from non-members in what they buy, it is helpful to focus on one product group. For instance, Total Core Majors offers a good, consistent mix of all membership groups (9 percent to 10 percent of products purchased). Let’s look at a few noteworthy findings.
Online vs in-store appliances
People with online club memberships, such as Amazon Prime and Walmart+, are more likely to purchase appliances online. By contrast, Sam’s Club members are more likely to purchase appliances in a retail store. Those without any warehouse club membership are the most likely to have made their purchase in a brick-and-mortar store rather than online.
Appliance delivery and installation
AAA members are more likely to opt for delivery after purchasing an appliance and for the installation of an appliance with delivery. About 2 out of 3 people who are not AAA members still opt for delivery, but more often than not opt for self-installation. Sam’s Club members show similar preferences for installing appliances on their own. Non-membership owners are more likely than those with memberships to do their own installation of major appliances. While the majority of non-warehouse club members have their appliances delivered (as is the norm for most buyers in the US), they are more likely to pick up their major appliance purchases themselves than buyers with club memberships.
Buying appliance service contracts
Even though both club members and non-members are offered service contracts on new appliances at generally the same rate, Walmart+ members seem to be most likely to purchase a service contract with a new appliance.
Smart appliance purchases
Customers who hold a Walmart+ membership show more preference for smart appliances than customers who have other types of club membership. Non-club members who buy appliances are the least likely to purchase a smart appliance.
Today’s Shoppers Are Mostly Club Members
Club memberships are popular with today’s consumers. Over the last 10 years, more than 75 percent of all product purchases were made by a consumer who held at least one club membership. In the last few years, that number has grown even more—as high as 85 percent and above. At the same time, the number of buyers who don’t own any club memberships has been steadily decreasing. In 2012, more than 40 percent of consumers were not club members, whereas that number is about 15 percent today.
The impressive numbers should come as no surprise when Amazon Prime has a membership rate that averages better than 60 percent. TraQline data indicates that other club membership rates have also remained largely consistent. By getting to know how different club members shop, where they shop, and what they buy, targeted marketing can be even further refined.
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