A surge in adoption from low-income households (or households earning less than $50,000 in annual income) helped Amazon.com, Inc. (AMZN) bolster membership numbers for its Prime service by 48.5% this past holiday season, according to a new note from research firm Baird Capital. Baird analyst Colin Sebastian wrote that Prime adoption is "increasing the fastest among lower-income householders, which should drive continued incremental share gains at the expense of more discount-oriented retailers."

In simple words, this means that the service could threaten rewards and loyalty programs at big box stores, such as Wal-Mart Stores, Inc. (WMT). Baird Capital estimates that Amazon Prime ended the year with between 55 million and 60 million members. (See also: Is Amazon Prime's $99 Annual Fee Worth It?)

According to a December 2015 analysis by Cowen & Co, Prime subscribers had an average household income of $69,000. That figure is 12% higher than the corresponding figure for Wal-Mart's membership program. Analysts say that online retail has inherent cost advantages over physical retail for low-income shoppers. (See also: Wal-Mart and Costco Improve Their Rewards Programs.) 

Amazon made concerted efforts to target and improve its service to this demographic. It ran promotional campaigns that offered Amazon Prime membership free of cost. Amazon was also the subject of a Bloomberg report last year that detailed the disparity in its Prime service deliveries to low-income neighborhoods as compared with surrounding areas. Amazon made amends in Boston after the report was published. 

In an interview with online publication Business Insider, Baird analyst Sebastian indicated that Amazon Prime's new pricing tiers could have something to do with its growing popularity among low-income households. "It seems to coincide with Amazon's efforts to reach this income bracket, although we can’t say definitively that these were the drivers," he told the publication. (See also: Patience Will Pay With Amazon Prime.)