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Published on July 16th, 2018 | by The GC Team

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New research reveals Amazon’s retail dominance

New research released today by global eCommerce consultancy Salmon reveals the level of retail behemoth Amazon’s domination and its continuing influence on consumer shopping behaviours.  

The Future Shopper study, published on Amazon’s Prime Day, shows that the retailer leads as consumers’ preferred starting point for shopping and it is also where consumers complete the majority of their online purchases.

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

Top findings of the study included:

    • 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%)  
    • 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
    • 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

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.”

Jat Sahi, Digital Lead for Retail at Fujitsu, said the 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.”

Sahi believes 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,” he said.

“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.”

Sahi added that Fujitsu’s own research found that only half of retailers have a digital strategy in place to develop a superior customer journey.

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