Jefferies survey of U.S. Amazon shoppers reveals key behavioral trends

A recent Jefferies survey of 700 U.S. Amazon shoppers indicates resilient spending patterns, with 62% spending the same or more in the last three months despite widespread inflation concerns, though 31% are showing caution by spending less. Amazon Prime remains a significant loyalty driver, boasting 73% membership and high retention, while the upcoming extended Prime Day is anticipated to further boost engagement. Amazon maintains its dominance in online retail for shipping and selection, leading Jefferies to reiterate its Buy rating, noting the stock trades at a ~30% discount to its 10-year average EV/EBITDA.

Analysis

A recent Jefferies survey indicates a dual-sided narrative for Amazon's consumer base amidst inflationary pressures. While overall spending appears resilient, with 62% of 700 U.S. shoppers reportedly spending the same or more in the last three months, signs of caution are evident. A notable 31% have reduced their spending, and 34% are shopping less frequently, directly attributing their concern to potential price hikes from tariffs. A key forward-looking risk is that 45% of consumers would cut back on Amazon specifically, rather than shift to other retailers, if inflation worsens. Despite this, Amazon's competitive moat remains robust, anchored by its Prime membership, which at 73% penetration, vastly outpaces competitors like Walmart+ (26%) and Target Circle (22%). Although 19% of Prime members are considering cancellation—a figure slightly higher than for Walmart+ and Costco—the upcoming extended four-day Prime Day event is positioned as a significant catalyst to drive engagement and new sign-ups. The company maintains its lead in critical e-commerce metrics such as shipping (72% vs. Walmart's 13%) and product selection (74% vs. 13%), though it trails Walmart in price perception (37% vs. 46%). From a valuation standpoint, Jefferies reiterates a Buy rating, citing that Amazon's stock trades at an approximate 30% discount to its 10-year average EV/EBITDA multiple.

Key Decisions for Investors

• Given the resilient consumer spending, the dominance of the Prime ecosystem, and a valuation trading at a discount to its historical average, investors could view the upcoming Prime Day as a significant near-term catalyst.
• Investors should closely monitor consumer sensitivity to inflation, as the survey indicates that a substantial 45% of shoppers would cut spending on Amazon directly, posing a tangible risk to revenue if macroeconomic pressures intensify.
• While Amazon's lead in shipping and selection is a core strength, Walmart's superior price perception (46% vs. 37%) is a key competitive factor to watch, particularly if consumers become more price-sensitive.
• The Prime membership churn metric, with 19% of members considering cancellation, warrants attention as an early indicator of potential weakness in the company's primary loyalty and revenue-driving program.