Ecommerce search trends: 51% start their online shopping journey on Amazon

17/07/2018

Consumers tend to purchase where they search with 51% of consumers starting their online shopping journey on Amazon, as the online retailer dominates over Google, according to new research.

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Amazon’s influence on consumer shopping behaviors continues to accelerate. Data from a new Future Shopper study released by Salmon, a Wunderman Commerce company, shows Amazon leads as consumers’ preferred starting point for shopping (51%), and also dominates where consumers complete the majority of their online purchases (55%).

Over 3,500 consumers who shop online across the US and UK were surveyed for this report.

Below are the top findings:


  • Amazon’s retail dominance, particularly over Google

    • 35% of all UK online spend goes through Amazon, 52% in the US

    • 51% of shoppers start their journey on Amazon (compared to 16% on Google) and 55% purchase their goods on Amazon, showing where you start is usually where you finish your shop

    • Price (64%) and free delivery (54%) is considered more important than brand (39%) for consumers



  • Consumers want retailers that are more digitally innovative and they are prepared to use tech such as automated shopping

    • 72% of consumers are more likely to shop with retailers that are digitally innovative – up from 60% in 2017

    • 57% of shoppers are now prepared to use Programmatic Commerce™ (automated shopping technology using IoT-connected devices) compared to 46% in 2017 and only 10% in 2016.




This year’s research shows Amazon capturing a significant share of online spending - 35% in the UK and 52% in the US. While 72% of consumers are more likely to shop with retailers that are digitally innovative – up from 60% in 2017, many retailers are still failing to meet these expectations. 72% of consumers state that retailers should be more innovative in their use of digital technology to improve their overall shopping experience. Additionally, consumers named ‘price’ (64%) and ‘free delivery’ (54%) as key criteria influencing purchasing decisions.

Hugh Fletcher, Global Head of Innovation and Consultancy at Salmon, said: “While Amazon’s dominance of the online retail market is no secret, few could have predicted how it has become not only the starting point in the online shopping journey, but also the predominant channel for product purchase. It’s clear that Amazon has set the standard for consumer expectations with its focus on price, delivery and innovation.”

Voice Assistants like Amazon Echo and Google Home continue to grow with 40% of consumers currently using or having used this capability. Brands must be prepared to capitalize on this new shopping channel as 55% of consumers are open to purchasing through voice-activated devices. However, 89% said they’d like to see the product on a screen before a voice assistant orders it.

Other notable findings from the report include:


  • Shoppers who don’t start their journey on Amazon or Google are more likely to shop on: eBay (11%), a retailer’s website (7%), the brand’s own website (6%) or social media sites (3%).

  • Amazon’s delivery services – Prime and Prime Now – have also had an impact on delivery expectations, with 22% of consumers now expecting same-day delivery and 43% expecting delivery within 24 hours.

  • The use of Programmatic Commerce™ which refers to the idea that IoT - connected devices can make purchasing decisions is only going to increase, with 57% of shoppers prepared to use this automated method, compared to 46% in 2017 and only 10% in 2016.


Analysis

Jat Sahi, Digital Lead for Retail at Fujitsu, commented on the implications of these findings for retailers: “This research underlines how much consumer expectations have shifted as a result of digital disruption in retail. Retailers such as Amazon have set new standards for convenience and low prices, and as a result over half of consumers start their shopping journey on Amazon. This statistic represents a mandate for transformation – in a dynamic retail climate, where structural issues such as inflation and low wage growth are also taking their toll, retailers need to make fundamental changes.

“The way forward is highlighted by the growing consumer appetite for a technologically augmented shopping experience. This is a huge opportunity for retailers to tap into the two key drivers of 21st century retail spending, convenience and experience. For example, connecting the consumer journey across mobile, desktop, and in-store can offer new ways to make shopping more seamless, while technology such as augmented reality can create a more immersive browsing experience.

“Despite this, in our own research we found that only half have a digital strategy in place to develop this superior customer journey. It is imperative that retailers ensure they are moving forward and adapting their offerings to match the ever-changing behaviours of consumers if they are to maintain and grow their customer base, and developing a creative and compelling digital strategy is the first step towards this.”

Chris McCullough, CEO and co-founder, Rotageek,focuses on how Amazon built its popularity by tying rapid fulfilment to the consumer experience. his should also act as inspiration for other retailers to use data to predict supply and demand and tie their own operations to provide equally compelling experiences.

“By tying rapid fulfilment to the consumer experience, Amazon quite rightly distinguishes itself from all competition and leaves many other retailers seeing the giant as their number one threat,” McCullough said. It seems unlikely any brand will be able to claim significant market share from Amazon any time soon, but retailers should be taking inspiration from its business model.

“When looking to attract customers by promising outstanding levels of service, simplicity and choice, Amazon doesn’t tolerate inefficiencies that prevent it from being able to deliver on these. Forward-thinking retailers should recognise that forging a new relationship between logistics and resourcing with branding is essential to building reputation, driving sales and being known as the best in their industry.

“In particular, digital technologies such as data-driven forecasting can help retailers accurately predict and meet demand to add more value where it really counts. For example, by applying data-driven insight to their resourcing and scheduling, retailers can appropriately roster staff to deliver unbeatable customer service.

“Looking at these figures, it’s clear many retailers still need to reassess the relationship between operations and brand experience. By aligning resources to provide the best service possible they give no reason for potential customers to look elsewhere.”

Nick Ford, chief evangelist at Mendix, discusses the importance of rapid experimentation and quick reaction to customer demand: “Amazon made its lead in the market by staying agile and allowing for rapid experimentation to anticipate and react to customer demand with new offerings often before consumers themselves were even aware of what they wanted in a retailer.

“Mobile apps are the new shop-fronts for retailers so it makes sense that it’s with their applications that they should apply most imagination and creativity. 72% of consumers want retailers to be more innovative in their use of digital technologies. Low-code approaches to application development, that require minimal coding knowledge and allow for rapid alterations based on customer feedback and insight, should certainly be considered. Although consumers may not be aware of the inner workings of the applications they use, the positive effects will certainly be felt. If a new initiative proves unsuccessful it can quickly be changed or remedied, the point is that retailers can experiment to make the most of new opportunities at speed.

But retailers shouldn’t limit a fail-fast mentality to their customer facing apps alone, operations and the backend are critical too. Streamlining digital technologies to minimise inefficiencies that ultimately deliver a better consumer experience can arguably make an even bigger impact.

“By using low-code to also lowers the barrier of technical knowledge needed to take part in application development, retailers can also reinvest money and resources previously spent on outsourcing this function or used to look outside of their business for new digital ideas. The best concepts are often found internally. By giving those employees interacting with customers the tools to build better solutions with their IT team, retailers can more effectively compete with the likes of Amazon in driving sales and delivering better customer service. Retailers might be quick to complain it’s difficult to find the right talent to make their digital initiatives come to life, but in reality ideas for growth can come from anywhere within the business. Brands need to tap into these ideas so all staff can contribute to digital projects.”

About the study

A total of 3,516 consumers aged between 18 and 64 who had shopped online at least once in the past month were interviewed online during April 2018, 2,016 from the UK and 1,500 from the US. The research was conducted by an independent research consultancy Censuswide.

Click here to download The Future Shopper report.

 

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