As the leader in e-commerce, Amazon continues to gain market share. According to Mintel research, e-commerce sales are expected to reach $1.2 trillion in 2024, a 9% increase over 2023. This expansion will continue, with a 36% increase anticipated over the next five years (2024-28).
Diana Smith, Associate Director, Client Advisor, Retail & eCommerce, Mintel, said:
"The allure of Amazon continues to have a strong hold over most online shoppers. However, it may not always be the first choice for Gen Z shoppers. Their shopping habits indicate a preference for personalization over privacy. They are inclined to discover new brands, which may not always align with Amazon's mass appeal. Amazon and other mass merchandisers may need to rethink their Gen Z strategy to increase loyalty from this demographic. The key lies in understanding how this generation thinks, shops, and perceives the world around them, which points towards unique and tailored shopping experiences.
"Retailers can remain competitive with Amazon by maintaining an active community presence through corporate social responsibility (CSR). Brands can adopt a local business mentality through meaningful CSR efforts. They should actively participate in the communities they serve, get customers involved, and lead efforts with dedicated, genuine conviction."
Consumers remain open to Prime alternatives
Amazon Prime membership has risen to an estimated 200 million worldwide, with 148.6 million (74%) in the US - an increase of 33% since 2020. While nearly three-quarters of adults (73%) say Amazon is their favorite place to shop, and the majority (65%) start their online shopping journeys with Amazon, consumers remain open to other options when it comes to their Prime membership: One-fifth (19%) of US adults say they would drop their Amazon Prime membership if another brand offered equivalent benefits. Americans are also using competitive services to a greater degree, including Netflix (46%) and Spotify (28%), and more than a third of Prime members (36%) are also Walmart+ members.
"Amazon Prime members only use three benefits on average, with Delivery, Video, and Music being the most popular. Amazon should be more active in encouraging members to take full advantage of their Prime program. Loyalty isn't a foregone conclusion. The further entrenched members are in the ecosystem, the more likely they'll stay loyal. Amazon could likely convert some nonmembers by highlighting that the tangible value of all Prime benefits exceeds the annual fee. This can also help keep current members satisfied," concluded Smith.
Additional research on US consumer attitudes toward Amazon and interviews with the analyst are available upon request from the Mintel Press Office. For those interested in purchasing the full report, please visit the Mintel Store.
SOURCE Mintel Group, Ltd.
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