Press Release - Hugh Fletcher, Jul 10 2017

Almost 40% of online spend goes through Amazon

Almost 40% of online spend goes through Amazon

Retailers must wise up and respond to the threat of Amazon

  • International research from global ecommerce consultancy Salmon reveals 37% of online spend is done through Amazon
  • 60% of consumers feel all online retailers should offer same day delivery
  • Six in ten would be more likely to spend with a retailer who is digitally innovative
  • Over half (53%) are more likely to buy from Amazon Prime than a retailer’s online store
  • Consumers believe that Amazon lead the way by far in digital retail

10 July, 2017, London: As Amazon Prime Day lands, global ecommerce consultancy Salmon reveals 37% of online spend is done through Amazon. This spend is only set to rise, as 73% of consumers say they will increase their use of digital shopping channels in the future.

Amazon has fashioned a model that is setting the expectation of customers’ for all retailers. In fact, over half (53%) of all international consumers surveyed say they are more likely to buy from Amazon Prime than a retailer’s online store. This highlights the increased adoption of subscription services in retail and the risk to brands and their direct to consumer (D2C) online business models. Owing to these high expectations Amazon has now set, 60% say they feel same day delivery should be offered by all online retailers.

Consumers believe Amazon is the most digitally powerful brand out there, ranking considerably higher than its nearest competitor. The vast majority (72%) of US consumers said that Amazon is “leading the way in digital retail”, with the UK and Belgium also ranking them as the market leader in ecommerce (57%).

Its innovative products could also play a part in that fact: over four in ten (42%) say they would love to shop with Amazon Echo, and are currently using or planning to use Amazon Dash in the next year. This emphasises the need for retailers to invest in new technology to harness this demand themselves. 60% also say if a retailer was more digitally innovative, they would be likely to spend more.

The American company seems to be more popular with men, as 43% of male consumers do all their online shopping with the retail company compared to 32% of women in the US, UK, Belgium and Netherlands.

Hugh Fletcher, Global Head of Consultancy and Innovation at Salmon said: “Retailers need to consider a balanced strategy on how they compete or collaborate with Amazon. Amazon has seized the day. Put simply, they fulfil their customers’ expectations better than most other retailers in the market. As consumers increasingly look to service, speed and convenience – rather than brand – Amazon sets the standard that others must follow or risk being locked out. The whole Prime premise is built around providing a same-day or next-day delivery. Amazon has even created its own market peaks with its Amazon Prime Day. We call this “proactive peak formation”. Its purpose is to encourage Prime membership and keep customers ordering exclusively through Amazon and away from other brands. With companies like Tesco launching their own one-hour delivery service, we’re seeing other retailers looking to halt Amazon’s dominance.

“While many retailers are still struggling with establishing omnichannel strategies, Amazon is taking omnichannel innovations to the next level through its partnerships, delivery options and multiple interfaces, which is what retailers must do if they’re to survive.

“These findings unveil the harsh reality for retailers that need to wise up to the threat of Amazon and create strong digital services both quickly and to a high standard. Amazon is seemingly always ten steps ahead of other retailers, and its continued expansion into other markets demonstrates its intent to sew up every industry in sight. Retailers must ask themselves, are they happy to give up their interface, their data, their customer, and their future, and become just another brand consigned to history? Or will retailers revolutionise their own offerings to combat the likes of Amazon and secure their futures?”

Further thought leadership from Hugh Fletcher on Amazon can be found here.

About the research

The survey was conducted by independent research company Censuswide who surveyed 6,084 consumers across the UK, US, Belgium and Netherlands.