Alexa, Are Echo Owners Good Customers?

Amazon has been aggressively selling Echos for eight years. And despite the pending layoffs in its Alexa unit, it is hard to deny that Amazon is a viable hardware company. Still, retail sales are the heart of the consumer operation, so we wanted to see if all these Echo owners are good Amazon shoppers, too.

Just over one-quarter of Amazon customers own at least one Echo device (Chart 1). This penetration rate increased quickly in the first four years after Amazon introduced Echo in November 2014. Over the past four years, the penetration rate leveled off at 25-30%. In the 12 months ending with the September 2022 quarter, 27% of Amazon customers owned an Echo. For comparison, the penetration rate for Amazon Prime has been about 70% for the past two years.