AMAZON SHOPPER REVIEW
Presented by:
Ben Than Soe
Analyst
June 2013
Executive Summary: Amazon Shopper Update
Amazon has seen dramatic growth in its shopper base. Amazon’s broad selection, convenient shipping
options, and other key initiatives have consistently attracted shoppers, growing from 34% in December
2007 to 57% in December 2012. Additionally, Amazon has the largest monthly shopper base—including
18% who shop weekly—among any retailer site.
Amazon is winning with two important demographic groups: Gen Y and high-income households.
As more Gen Y shoppers enter their household formation years, the proportion of Amazon’s shopper base
that comprises Gen Y shoppers has grown from 10% in 2008 to 16% in 2012. More than 3 in 10 (31%) of
these shoppers shop the site on a weekly basis—11 ppt higher than the next most frequent shopping
cohort, Gen X. Gen Y shoppers will become more vital to Amazon as they move into family life stages with
greater potential to add everyday household and consumable items to their basket. Additionally, more than
one-third (34%) of Amazon shoppers are up-market households (income level of USD85,000 or greater)
versus 26% of all shoppers. These shoppers have more spending power than the average shopper—which
bodes well for Amazon’s quest to grow share of wallet. Overall, Amazon shoppers’ near-term spending
intentions remain higher than all shoppers. As of March 2013, 70% of Amazon shoppers are planning to
spend more or about the same at retail in the near term than they did last year, which is 4 ppt higher than
the 66% rate of all shoppers.
Amazon shoppers are smart about how they shop. Amazon is a trusted online brand and research
destination for shoppers who want to vet purchases and read product reviews in advance of making a
purchase decision—regardless of where those purchases are made. Feeling like they got a “good deal” is
most important to Amazon shoppers, but they are not as concerned as all shoppers are about minimizing
spending. Instead, Amazon shoppers are more likely than all shoppers to rate purchasing high-quality
products (52%), having access to product info (35%), and discovering new products or brands (16%) as
important aspects of shopping.
Source: Kantar Retail analysis
© Copyright 2013 Kantar Retail
2
Executive Summary: Continued
Retailers across various channels are vulnerable to Amazon, but its potential impact is pronounced
for category specialists and general merchandisers. Cross-shopping at Amazon in 2012 by competitors’
monthly shoppers has increased an average of 24 ppt since 2007. Vulnerability is evident among mass
merchandiser, consumer electronics (CE), fashion, and home improvement retailers.
– Amazon is a “sticky” site for Target.com and Walmart.com shoppers. On a weekly basis, 72% of
Target.com and 63% of Walmart.com weekly site shoppers also shop Amazon, while a mere 22% and
24% of Amazon weekly site shoppers also shop Target.com and Walmart.com, respectively.
– Amazon is the starting and ending destination for CE purchases. More than a quarter (27%) of
shoppers began their search for their last CE purchase at Amazon, the most frequently cited starting
point. Additionally, when shoppers who first shopped Best Buy ended up purchasing on Amazon, 64%
of them cited a better price at Amazon. More than half (55%) of shoppers who started shopping at
Walmart but purchased at Amazon cited price.
– Amazon has upped the ante in fashion, and shoppers are noticing. Amazon attracts more
monthly shoppers than any fashion retailer, with 24% shopping Amazon for clothing, shoes, or
accessories on a monthly basis. A bigger threat to fashion retailers is that significantly more of their
shoppers are regular Amazon shoppers, e.g., 56% of Bloomingdale’s, 49% of Marshalls and Banana
Republic, and 48% of Macy’s monthly shoppers also shop Amazon for clothing at least once a month.
– Do-it-yourself … but with Amazon. AmazonSupply (revamped in April 2012) has put Amazon in a
better position to steal trips from Home Improvement (HI) retailers. Home Depot and Lowe’s shoppers
cross-shop Amazon at higher rates than at the other HI retailers.
Source: Kantar Retail analysis
© Copyright 2013 Kantar Retail
3
Executive Summary: Continued
Amazon’s acute focus on its shoppers has garnered a growing loyal shopper base. Amazon’s most
loyal shoppers participate in its membership programs. Designed to deliver added convenience and value
to shoppers, Prime and Mom members and participants in Subscribe & Save (SNS) have grown. Overall,
Prime incidence has grown from 10% in 2011 to 14% in 2012. SNS also has grown 1 ppt to 5% over the
same period and is evolving from an item-loyalty initiative into a basket-building catalyst. New to SNS in
2013 is a 15% discount available to all shoppers when they purchase five or more items in the same month.
For Mom members, this discount is a steeper 20%. This latest SNS initiative improves Amazon’s likelihood
to be a “prime” option for shoppers wanting add items to their basket.
Yet the more interesting trend is that a growing portion of Gen Y shoppers (9%, +3 ppt vs. 2011), is using
Subscribe & Save. Another new development is the growth of Prime membership among Gen X (18%, +4
ppt), Boomers (13%, +6 ppt), and Seniors (7%, +2 ppt)—which suggests Prime’s broadening appeal.
Source: Kantar Retail analysis
© Copyright 2013 Kantar Retail
4
Table of Contents
• Shopper Penetration
• The Amazon Shopper
– Demographic profiles
– Motivations and intentions
• Shopping Behaviors
– Trusted research destination
– Cross-shopping to Amazon
– Impact to category specialists
• Amazon Loyalty
– Prime and Subscribe & Save
© Copyright 2013 Kantar Retail
5
Shopper Penetration
© Copyright 2013 Kantar Retail
6
Online Shopping Is Growing
Online shopping peaks in the fourth quarter, with the Q4 2012 shopper
incidence hitting 75% of all shoppers.
2011
2012
70.2%
71.3%
*Comprises B&M.com sites and major pureplay etailers.
Source: Kantar Retail ShopperScape®, October 2010–March 2013
© Copyright 2013 Kantar Retail
7
Dramatic Growth in Amazon Shopper Base
Amazon’s broad selection, convenient shipping options, and other key
initiatives have consistently attracted shoppers.
Past 4-Week Amazon Shoppers
Among All Primary Household Shoppers
October 2007–March 2013
Key Initiatives
Jul. ’10 Launch
2005 Launch
2007 Launch
Source: Kantar Retail ShopperScape®, October 2007–March 2013
Sep. ’10
Launch
Feb. ’11
Launch
Nov. ’11 Launch
© Copyright 2013 Kantar Retail
8
Amazon Leads as Most Frequently Shopped
Amazon is sticky and has the largest monthly shopper base—including 18%
who shop weekly. Walmart and Target—with 19% and 27%, respectively, of
their shoppers shopping Amazon weekly—remain susceptible to Amazon.
Online Shopping Frequency at Select Sites
(Among All Shoppers)
71%
51%
48%
Total
Shopping
Incidence
19% of monthly
Walmart shoppers
shop Amazon weekly
41%
18%
16%
12%
5%
5%
27% of monthly
Target shoppers
shop Amazon weekly
4%
Source: Kantar Retail ShopperScape®, July 2012
© Copyright 2013 Kantar Retail
9
The Amazon Shopper
© Copyright 2013 Kantar Retail
10
Shoppers Are HHs w/Kids, Gen Y/X, Up Market
The profile of shoppers in Amazon’s loyalty programs Prime, Mom, and
Subscribe & Save skews more heavily younger and affluent.
Demographic Shopper Profile
All
Shoppers
Amazon
Monthly
Shopper
Prime
Member
Mom
Member
Subscribe
& Save
User
Sample Size
4021
994
554
103
205
79%
21%
11%
14%
11%
74%
13%
31%
38%
18%
25%
48%
26%
79%
12%
3%
1%
78%
22%
13%
14%
11%
72%
16%
35%
36%
13%
18%
48%
33%
80%
10%
5%
1%
79%
21%
14%
21%
16%
64%
17%
39%
35%
9%
19%
42%
39%
79%
9%
5%
1%
86%
14%
47%
24%
18%
38%
24%
57%
16%
3%
19%
46%
35%
65%
11%
8%
1%
75%
25%
24%
16%
10%
62%
24%
40%
23%
14%
25%
40%
35%
67%
14%
10%
0%
Female
Male
Under 6
Presence of 6-12
Children 13-18
No children <19
Gen Y
Gen X
Generation
Baby Boomers
Seniors
Down Market (<$25K)
Income
Middle Market
Market
Up Market ($85K+)
White
African American
Race
Asian or Pacific Islander
Native American
Gender
Amazon
Shoppers
are more
likely to be
HHs w/Kids
Gen Y/X
Up Market
Asian
Note: Shading indicates significantly greater percentage, compared with all shoppers; border indicates significantly lower percentage (95% confidence level).
Source: Kantar Retail ShopperScape®, December 2012
© Copyright 2013 Kantar Retail
11
Amazon Is Winning Younger Shoppers
Amazon has consistently drawn a disproportionate share of Gen Y and Gen X
shoppers, but Gen Y is most active. More than three-fourths of this shopper
cohort have ever shopped Amazon, and 31% shop on a weekly basis.
Amazon Shopping Frequency
Total
Shopping
Incidence
71%
77%
74%
72%
61%
Generations
All Shoppers
Amazon Monthly Shoppers
Note: Border indicates significant change over time.
*Read as: 31% of Gen Y shoppers shop Amazon.com on a
weekly basis.
Source: Kantar Retail ShopperScape®, July 2012 and January–December 2008 and 2012
© Copyright 2013 Kantar Retail
12
Shoppers Skew toward High Income
Amazon shoppers have more spending power than the average shopper: 34%
of its shopper base is up market vs. 26% of all shoppers. This profile bodes
well for Amazon’s quest to grow share of wallet.
Income Market: 2012
All Shoppers
26%
Up
Market
$85K+
34%
48%
Middle
Market
48%
26%
Source: Kantar Retail ShopperScape®, 2012
Monthly
Shoppers
Down
Market
<$25K
18%
© Copyright 2013 Kantar Retail
13
Financial Concerns Are Steady vs. Last Year
Assessment of investments worth and home value have improved since 2012,
while views of everything else remain stable.
Household Financial Health of Amazon Shoppers
Job Security
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Household Income Level
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Credit Card Debt
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Monthly Mortgage/Car Payments
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Worth of Investments
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Value of Home
Much better/somewhat better off
No change from last year
Somewhat worse/much worse off
Source: Kantar Retail ShopperScape®, January–March 2012 and 2013
Q1 2012
Q1 2013
21%
62%
17%
21%
62%
17%
33%
45%
22%
32%
44%
25%
27%
57%
16%
26%
56%
17%
21%
69%
11%
22%
66%
12%
27%
51%
22%
30%
54%
16%
18%
56%
26%
27%
57%
17%
Note:
Shading
indicates
significant
year-to-year
difference
(85% CL)
© Copyright 2013 Kantar Retail
14
Stronger Spending Sentiment
Amazon shoppers remain more confident than all U.S. primary household
shoppers in their near-term spending intentions; however, the gap between
all shoppers has narrowed a bit in early 2013.
Near-Term Spending Plans: Percent Planning to Spend
More/About the Same vs. Same Time Last Year
Near-Term Spending Plans vs. Same
Time Last Year: Q1 2013
(three-month moving average)
Note: Arrow indicates Amazon shoppers as significantly higher than
all shoppers; box indicates significantly lower(95% confidence level)
Source: Kantar Retail ShopperScape®, October 2009–March 2013
© Copyright 2013 Kantar Retail
15
Shopping Behaviors
Trusted
Source
© Copyright 2013 Kantar Retail
16
Amazon Is Most Trusted Brand
Shoppers want to vet purchases; Amazon is the source. More shoppers use
Amazon for comparing prices, product reviews, and gift ideas than for deals.
Amazon Usage as Part of Holiday Shopping
(among holiday gift shoppers)
> 2x the
30% of shoppers
began researching
their last online
purchases at
Amazon
number who
began their
research with
Google
Source: Harris Interactive Poll RQ Study, Forrester study July 2012; Kantar Retail ShopperScape®, December 2012
© Copyright 2013 Kantar Retail
17
Amazon Shoppers Are “Smart” Shoppers
They prioritize getting a “good deal” over minimizing spending—the opposite
of all shoppers. More Amazon shoppers also rate quality products, access to
information, and discovering new products/brands as important.
What’s Important When Shopping?
(percent of shoppers ranking factor as one of top four most-important factors while shopping)
Note: Arrow indicates Amazon shoppers as
significantly higher than all shoppers; box
indicates significantly lower(95% confidence level)
Source: Kantar Retail ShopperScape®, January 2013
© Copyright 2013 Kantar Retail
18
Cross-Shopping at Amazon Is Accelerating
Retailers’ Monthly Shoppers Who Have Cross-Shopped Amazon in
Average 4-Week Period
All Shoppers
Target
Walmart
Costco
BJ's Wholesale Club
Sam's Club
Rite Aid
CVS/pharmacy
Walgreens
Toys "R" Us
Best Buy
PETCO
PetSmart
The Home Depot
Lowe's
Macy's
Sears
Kohl's
JCPenney
Saks Fifth Avenue
Bloomingdale's
Nordstrom
Neiman Marcus
H-E-B
Kroger
Publix
Safeway
Dollar General
Family Dollar
2007
2012
Change '07-'12
26%
36%
24%
35%
32%
29%
32%
30%
28%
45%
43%
39%
35%
32%
32%
38%
33%
33%
32%
61%
57%
50%
57%
28%
26%
25%
33%
20%
21%
47%
61%
48%
59%
56%
53%
57%
55%
53%
70%
69%
66%
62%
61%
59%
63%
62%
60%
58%
79%
78%
73%
70%
50%
49%
49%
55%
45%
45%
21
25
24
24
24
24
25
25
25
25
26
28
26
29
27
25
29
27
26
18
21
23
12
23
23
23
22
25
24
Source: Kantar Retail ShopperScape®, 2007, 2012
Other retailers are increasingly
more likely to share shoppers with
Amazon. Across retailers on
average, Amazon ended 2012 as
the most cross-shopped retailer,
replacing Walmart.
All shoppers more
likely to be shopping
Mass
Club
Drug
Cat. Specialists
Department Stores
Supermarkets
Value
© Copyright 2013 Kantar Retail
19
Mass Players’ Vulnerability Is 1-Click Away
Target’s and Walmart’s online shoppers are significantly more likely to include
Amazon in shopping routines than vice-versa.
Website Cross-Shopping: Weekly Site Shoppers
All
Shoppers
*
*
*
18%
100%
72%
63%
5%
22%
100%
42%
7%
24%
54%
100%
*Weekly website shoppers
Read as: 18% of US primary
household shoppers shop
Amazon.com weekly; 22% of
weekly Amazon shoppers also shop
target.com weekly and 24% also
shop walmart.com weekly.
Source: Kantar Retail ShopperScape®, July 2012
© Copyright 2013 Kantar Retail
20
Amazon Impact Is Pronounced in CE
Amazon is the starting place for more than a quarter (27%) of CE purchases.
Also, it has lured shoppers from Walmart and Best Buy with lower prices, free
shipping, and a broader selection.
Where Shoppers Started Search for Last CE Purchase
27%
13% 10%
9% 9%
9%
12%
3%
Among shoppers who bought a consumer electronics product
on Amazon.com after shopping a Best Buy or Walmart store…
Amazon had a better price
Free shipping
Amazon had a better selection from which to choose
Had gift card/gift certificate redeemable at Amazon
The item was not in-stock at Best Buy or Walmart
Amazon was a more convenient option
Amazon had a better selection of brands
Its online product reviews helped convince me to buy at Amazon
Amazon's product information was more helpful
I am a member of Amazon Prime
2% 2%
2% 1%
Why Purchased on
Amazon Instead of at
Best Buy
Why Purchased on
Amazon Instead of at
Walmart
64%
27%
23%
21%
17%
17%
15%
14%
11%
10%
55%
33%
24%
22%
27%
17%
23%
14%
15%
16%
Arrows on top chart indicate significant difference from 2012 data (95% confidence level)
Source: Kantar Retail ShopperScape®, January 2013
© Copyright 2013 Kantar Retail
21
Fashion Retailers Are Vulnerable to Amazon
Amazon’s total apparel shopper base lags that of Kohl’s or JCPenney, but the
retailer draws more apparel shoppers on a monthly basis. Many fashion
retailers share a significant portion of their shoppers with Amazon.
Shopping Frequency at Retailer for Clothes,
Total
Shoes, or Accessories
Shopping
60%
Incidence
Retailer’s Monthly Shoppers Who Shop at
Amazon Once a Month or More for
Clothes, Shoes, or Accessories
68%
68%
55%
47%
49%
43%
32%
25%
* Past 4-week shoppers of retailer
Note: Pink bars indicate significantly higher difference that all
shoppers (95% CL)
Source: Kantar Retail ShopperScape®,, March 2013
© Copyright 2013 Kantar Retail
22
HI Retailers also Share Shoppers with Amazon
AmazonSupply (revamped in April 2012) has put Amazon in a better position
to steal trips from Home Improvement (HI) retailers. Home Depot and Lowe’s
shoppers cross-shop Amazon at higher rates than at the other HI retailers.
Home Improvement Cross-Shopping Patterns
(Among shoppers who shopped retailers in the past four weeks)
The Home Depot
Lowe's
Walmart
71%
Walmart
77%
Amazon.com
58%*
Amazon.com
57%
Target
55%
The Home Depot
51%
Lowe's
48%
Target
51%
Walgreens
46%
Walgreens
45%
Menards
6%
Menards
7%
*Read as: 58% of Home Depot shoppers also
shopped Amazon.com in the past four weeks.
Source: Kantar Retail ShopperScape®, January-December 2012
© Copyright 2013 Kantar Retail
23
Amazon Loyalty
© Copyright 2013 Kantar Retail
24
Memberships Are Customer Focus in Action
Amazon leverages its membership programs to cultivate a loyal shopper
base. The Mom, Subscribe & Save, and Student programs are designed to
feed shoppers into the Prime program.
Launched
Promotional
Prime length
Discounts/
Benefits
Annual Fee
2005
September 2010
May 2007
July 2010
1 month
3 months
NA
6 months
2-Day Shipping
Expedited shipping
options (reduced)
Prime Instant Video
1 e-book per month
(Kindle)
20% off diapers and
wipes (5% SNS), and
other SNS items
(w/paid Prime);
Exclusive babyoriented discounts
5-15% discount
off eligible items
Free standard
shipping; 15% for
5+ items per
month
Discounts on
textbooks, video
games, college &
dorm room, other
exclusive promos
$79
3-month trial; $79 for
full membership
benefits (joining
Prime)
None
6-month trial; $39 for
full membership
benefits (joining
Prime)
Source: Company websites, Kantar Retail analysis
© Copyright 2013 Kantar Retail
25
Amazon Loyalty Programs Are Growing
Prime members and SNS users have grown, indicating that Amazon is
effectively recruiting loyal shoppers.
Amazon Membership Incidence
of all Prime members
are NEW to Prime this
holiday season
Note: arrows indicate significant difference vs. last year (90% confidence level)
Source: Kantar Retail ShopperScape®, December 2011 and 2012
© Copyright 2013 Kantar Retail
26
Amazon Strives for Item and Basket Loyalty
Broad selection makes Amazon an ideal place to find a specific item, but
growth in SNS and Prime membership across generations suggests Amazon
also is becoming a viable basket destination for shoppers.
Growing loyalty at the item level
Growing loyalty across categories
Membership
Membership
Dec
2011
Dec
2012
Gen Y
17%
17%
7%
Gen X
14%
18%
3%
3%
Boomers
7%
13%
2%
4%
Seniors
5%
7%
Dec
2011
Dec
2012
Gen Y
6%
9%
Gen X
6%
Boomers
Seniors
From 1 box
at a time to
many!
Note: arrows indicate significant difference vs. all shoppers (90% confidence level)
Source: Kantar Retail ShopperScape®, December 2011 and 2012
© Copyright 2013 Kantar Retail
27
Relentless Focus on Shopper Drives Growth
Prime, Mom, Student, and Subscribe & Save deliver a value proposition that
retains shoppers, resulting in a customer base growing by ~15% each year.
Amazon's "Loyalty" Index
60%
57.1%
55.8%
55.4%
54.8%
52.7%
(% of Past 4 Week Shoppers that Are Monthly Shoppers)
55%
52.6%
52.3%
48.8%
50%
50.5%
46.8%
45.2%
45%
45.5%
42.7%
40.1%
42.7%
41.2% 41.2%
40%
37.7%
36.0%
35%
34.1%
45.4%
41.5%
34.1%
December = Highest traffic
month, but convert to monthly
30%
Source: Kantar Retail ShopperScape®, December 2007 – March 2013
© Copyright 2013 Kantar Retail
28
Ben Than Soe
Analyst
ben.thansoe@kantarretail.com
501 Boylston Street
Suite 6101
Boston, MA
02116
T +1 617 912 2854
F +1 630 245 5647
www.KantarRetailiq.com
© Copyright 2013 Kantar Retail