Prime helps Amazon capture nearly half of all holiday e-commerce sales

Amazon Prime membership is up to about 88 million, according to GBH Insights.

Amazon.com Inc. snapped up between 45% and 50% of all online holiday retail sales, up from 38% last year, with Prime membership serving as the “golden jewel of the Bezos empire,” according to GBH Insights head of technology research Daniel Ives.

E-commerce sales increased about 18% year-over-year, according to GBH estimates. Ives puts Prime membership at about 88 million accounts, with subscribers spending 22% more this holiday season versus last.

“The ring-fence that Amazon AMZN, +0.47%   has built around its Prime customer base has significantly benefited the company in a fiercely competitive pricing environment, with much more competitive prices and inventory from Wal-Mart WMT, -0.17%   in particular seen over the last month, [and] with Target TGT, -1.05%   and Best Buy BBY, +0.52%   also holding their own based on our analysis and retail tracking,” the GBH note said.

Among the top-selling holiday items on Amazon were the $699 iRobot Roomba 690 Robot Vacuum with Wi-Fi and the Nerf N-Strike Elite Strongarm Blaster for $11.50.

See also: What Americans bought on Amazon this holiday season

Amazon says more than 4 million people started Prime trials or started paid memberships in one week. And the company’s own Echo Dot and Fire TV Stick were the top-selling products across all categories, according to Amazon.

GBH believes the Echo and Alexa products will be a focus for the near term, along with Prime, the Whole Foods integration, fulfillment investments and Amazaon Web Services cloud subsidiary, which could depress margins. AWS is targeted as a long-term benefit, including driving growth and cash flow, particularly as the company expands internationally. Global growth is expected to be significant in 2018.

High sales for Alexa-enabled devices indicate a growing “mindshare” for Amazon, placing the company deeper in the daily lives of consumers, Instinet analysts led by Simeon Siegel wrote in a note published Wednesday. Instinet estimates that incremental sales of Echo Dot, at the $29.99 price point, could total $600 million.

Read: Consumer confidence slips in December, but 2017 viewed as best year since 2000

Coming back to Wal-Mart, GBH thinks the retail giant could have potentially doubled its holiday season share of online sales this holiday season.

“While Wal-mart is emerging as Amazon’s biggest sole competitor online, we believe customer overlap remains small today as Prime membership growth and Amazon’s ‘stronghold on e-commerce’ remain hard to penetrate as we expect this trend to play out in the near-term heading into 2018,” Ives wrote.

Wal-Mart went into the final holiday shopping weekend as a traffic winner, according to store checks conducted by MKM Partners. Five Below Inc. FIVE, +0.46%   and Dollar Tree Inc. DLTR, -1.11%   were also on the list.

Wal-Mart shares were among the stocks, including J.C. Penney Co Inc. JCP, -3.32%  , Kohl’s Inc. KSS, -3.41%  , and Rite Aid Corp. RAD, -0.99%  , that rallied in Tuesday trading after reports of increased holiday spending.

Don’t miss: Here’s what all 30 companies that make up the Dow industrials think about the tax cuts

Amazon shares are up 53.7% for the past year, outpacing Wal-Mart shares, which are up 42.3% for the last 12 months, and the S&P 500 index SPX, +0.01%  , which is up 18.3% for the past year. The Dow Jones Industrial Average DJIA, +0.06%   is up 24.1% for the last year.

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