Transcript Amazon shoppers are motivated by

Annual Shopper Review:
Amazon
Presented by:
Anne Zybowski, Vice President, Retail Insights
Nicole Santosuosso, Junior Analyst
November 2014
Copyright © 2014 Kantar Retail. All Rights Reserved.
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Disclaimers
The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views
expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.
This seminar is not endorsed or otherwise supported by the management of any of the companies covered
during the course of the workshop or within the following slides.
© Copyright 2014 Kantar Retail
Amazon 2014 Shopper Review
Executive Summary
• Amazon’s shopper base continues to accelerate amidst a competitive landscape where
other retailers are facing flat to declining penetration. With its growing assortment and
content ecosystem, Amazon continues to drive growth by capturing new shoppers—and
converting more shoppers into loyal shoppers. As such, Amazon is driving its overall
shopper base AND shopper frequency. The retailer leads as the most frequently shopped
retailer across top online competitors; it is approaching Walmart’s level of overall retailer
penetration.
• Amazon’s core shopper base is predominantly families. Amazon shoppers tend to be
higher-income households with children younger than 12 years old. Leading shopping
frequency are Gen X and Gen Y, indicative of the retailer’s continued efforts to engage with
these younger shoppers through its various life stage programs such as Amazon Mom,
Amazon Student, and Subscribe & Save.
• From an economic standpoint, Amazon shoppers tend to be more positive about their
overall financial health. Amazon shoppers are “smart” shoppers who enjoy feeling like
they got a “good deal,” and prioritize the “functional” aspects of the shopping trip such as
having a stress-free experience and access to high-quality products and information.
Source: Kantar Retail analysis
© Copyright 2014 Kantar Retail
3
Amazon 2014 Shopper Review
Executive Summary
• Competition beware: the extensive growth of Amazon’s shopper base has contributed to its
acceleration as one of the most cross-shopped retailers, particularly among department
store, mass, and specialty retailer shoppers. As Amazon enhances its offer in “new”
categories such as beauty, apparel, and consumables, more retailers will be at risk.
• Amazon has continued to grow its brand reputation as a trusted and reliable source of
not just products, but also of information. This is especially true during the holidays, as
shoppers frequently look to Amazon for gift ideas, product reviews, and to compare prices.
Amazon's efforts were especially evident last holiday season, as the retailer topped
Walmart as the number one destination for holiday shopping.
• Crucial to Amazon’s overall shopper value proposition are its membership and
lifestyle programs, most notably Amazon Prime. Prime penetration has continued to
accelerate at a rapid speed, and has caused significant impact to overall shopping
behaviors. While the program began as free two-day shipping to remove barriers to
purchase and accelerate topline growth, digital content and the evolving ecosystem moves
a Prime membership beyond a transactional relationship to drive “share of life” with
Amazon’s most loyal shoppers.
Source: Kantar Retail analysis
© Copyright 2014 Kantar Retail
4
Agenda
• Shopper Penetration and Profile
– Channel Penetration
– Shopper Profile
• Shopper Motivations
– Spending Intentions
– Spending Priorities
– Motives to Visit
• Shopping Behaviors
– Where Else Amazon Shoppers Shop
– Trips & Trip Types
• Brand Perception
– Amazon as a “Trusted Brand”
– Loyalty & Prime Capture Rates
• Growth Platforms
– Life Stage Programs
– Prime Impact
© Copyright 2014 Kantar Retail
5
®
Data Source: About the ShopperScape Survey
What?
Who & When?
• 4,000 primary household shoppers per
month
• Representative sample of ~50,000 unique
primary household U.S. shoppers
annually; 80:20 female:male ratio
• Monthly and quarterly tracking questions on
retailers and venues shopped, products
purchased, where spend the most, near-term
spending outlook, and household financial
health
• New questions each month on timely, topical,
and seasonal issues (including key holiday
periods) affecting shopping behavior
How?
• Fielded online the third week of every month
• Survey fielded through LSR access panel
Coverage
• 200+ retailers across all sectors of retail – a
complete picture
• 81+ category groups (e.g., candy/gum, noncarbonated beverages; not specific categories)
•
7 major departments (e.g., food/groceries)
© Copyright 2014 Kantar Retail
6
Shopper Penetration
© Copyright 2014 Kantar Retail
7
Shopper Penetration and Profile
Amazon’s shopper base continues to accelerate. Not only is Amazon gaining
new shoppers, but shopping frequency is accelerating as well. As of August
2014, 59% of all Amazon shoppers report shopping the retailer on a regular
basis, at least once a month.
• Amazon’s shoppers are families. Amazon shoppers largely comprise higherincome households with children younger than 12. From a generational perspective,
Amazon shopping is driven by Gen X and Gen Y; in particular, Gen Y leads overall in
shopping frequency and has grown in share of shoppers over the past five years.
This is indicative of the retailer’s continued investment in the programs with strong
life stage appeals such as Subscribe & Save, Amazon Mom, and Amazon Student.
• Subscribe & Save has particular appeal to the down-market shopper.
• Amazon leads in shopping frequency. Amazon leads as the most frequently
shopped retailer across Amazon-owned sites and select online competitors including
Walmart.com, Target.com, and eBay. Amazon’s weekly shoppers are more than
double that of Walmart.com, and triple Target.com.
Source: Kantar Retail analysis
© Copyright 2014 Kantar Retail
8
Amazon Shoppers Are Increasingly Families
Female, Gen X/Y; Higher-income HHs w/ kids younger than
12 … but don’t count out the down-market shopper appeals
All
Shoppers
Amazon
Monthly
Shopper
Prime
Member
Mom
Member
Subscribe
& Save
User
Sample Size
4005
1182
755
82
222
Female
Male
Under 6
Presence 6–12
of 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 non-Hispanic
Black non-Hispanic
Race
Hispanic
77%
23%
8%
13%
11%
77%
16%
32%
39%
13%
25%
48%
27%
69%
12%
12%
76%
24%
9%
14%
11%
75%
19%
33%
40%
11%
20%
48%
33%
71%
9%
13%
79%
21%
14%
21%
16%
64%
17%
39%
35%
9%
19%
42%
39%
69%
10%
13%
86%
14%
40%
28%
11%
40%
40%
50%
11%
0%
12%
57%
32%
62%
9%
20%
82%
18%
14%
22%
14%
63%
23%
42%
28%
8%
30%
39%
32%
56%
17%
19%
Demographic Shopper Profile
Gender
Amazon
Shoppers are
more likely to
be …
HHS W/KIDS
GEN Y/X
SNS appeal to
down market
shopper
UP MARKET
HISPANIC
Note: Shading indicates significantly greater percentage, compared with all shoppers; border indicates significantly lower percentage (95% confidence level).
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
9
Amazon Growth in New Shoppers Continues
As shopper bases contract at competitors, Amazon
approaches Walmart-level penetration
Past 4-Week Shoppers, by Retailers*
(among all primary household shoppers)
* Inclusive of visits to stores/websites and use of catalogs
Source: Kantar Retail ShopperScape®, August 2007–August 2014
© Copyright 2014 Kantar Retail
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Not Just New … More “Loyal” Shoppers
Trial (especially holiday) leads to habit, habit to loyalty
Amazon's "Loyalty" Index
(% of Past 4 Week Shoppers that Are Monthly Shoppers)
61.2%
57.1%
52.6%
54.8%
46.8%
50.5%
44.6%
42.7%
56.5%
45.5%
50.1%
45.4%
42.7%
36.0%
34.1%
December = Highest traffic month,
but convert to monthly
Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
Feb-12
Apr-12
Jun-12
Aug-12
Oct-12
Dec-12
Feb-13
Apr-13
Jun-13
Aug-13
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
34.1%
Source: Kantar Retail ShopperScape®, December 2007–August 2014
© Copyright 2014 Kantar Retail
11
Amazon Winning Younger Shoppers
Disproportionately draws youngers shoppers, and they shop
(a lot) more often, with 28% of Gen Y shopping weekly
Amazon Shopping Frequency,
by Generation
Shopper Profile, by Generation
All Amazon Shoppers
Total
Shopping
Incidence
85%
76%
82%
73%
59%
Amazon Monthly Shoppers
Source: Kantar Retail ShopperScape®, January–December 2009 and 2013 (left) and July 2014 (right)
© Copyright 2014 Kantar Retail
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Amazon Leads as Most Frequently Shopped
Nearly 20% of Amazon shoppers are weekly
Shopping Frequency: Amazon, Amazon-Owned Sites,
and Select Online Competitors
76%
52%
Total
Shopping
Incidence
45%
40%
19%
6%
*Any of diapers.com, soap.com, casa.com, or yoyo.com
Source: Kantar Retail ShopperScape®, July 2014
© Copyright 2014 Kantar Retail
13
Gen X & Y Driving Shopper Base Growth
Gen X approaching Gen Y in terms of weekly shopping; Boomers
now less likely to shop weekly, but still shopping at same incidence
Amazon Shopping Frequency, by Generation: 2014 vs. 2013
Total
Shopping
Incidence
76%
76%
81%
85%
80%
82%
74%
74%
68%
59%
ALL SHOPPERS
GEN Y
Source: Kantar Retail ShopperScape®, July 2013 and July 2014
GEN X
BOOMERS
SENIORS
© Copyright 2014 Kantar Retail
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Shopper Motivations
© Copyright 2014 Kantar Retail
15
Shopper Motivations
Spending behaviors of Amazon “smart” shoppers continue to evolve as they
look for a “good deal.” Overall, Amazon shoppers prioritize the “functional”
aspects of shopping and having a stress-free shopping experience.
• Amazon shoppers feel good about financial health. From job security to
credit card debt, Amazon shoppers feel more confident about their financial well
being and overall ability to spend. This is a clear opportunity for Amazon as its
shoppers are more likely to plan on spend more vs. last year. This coincides with
the Amazon shopper’s mentality of “getting a good deal,” which they prioritize
over spending as little money as possible.
• Amazon shoppers are motivated by “smart” shopping. Amazon shoppers
value “smart” shopping, such as purchasing high-quality products and getting
information about new products and brands. Amazon shoppers also enjoy the
functional aspects of the trip, such as saving time by getting all their shopping
done as quickly as possible, and getting everything they need in one place.
Source: Kantar Retail analysis
© Copyright 2014 Kantar Retail
16
More Positive About Financial Health
Driven by strong up-market shopper base
Household Financial Health vs. Same Time Last Year: Amazon Shoppers vs. All Shoppers, January–June 2014
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
All
Shoppers
Monthly Amazon
Shoppers
19%
66%
15%
21%
65%
13%
30%
50%
21%
35%
48%
18%
25%
61%
15%
26%
60%
14%
21%
69%
10%
22%
68%
10%
28%
59%
13%
33%
55%
11%
28%
61%
11%
32%
59%
9%
Note: Shading indicates significant difference between columns (90% confidence level).
Source: Kantar Retail ShopperScape®, January–June 2014
© Copyright 2014 Kantar Retail
17
Stronger Spending Sentiment
Opportunity for Amazon to capture bigger share of wallet
Near-Term Spending Plans: Percent Planning to Spend
More/About the Same vs. Same Time Last Year
(three-month moving average)
Near-Term Spending Plans vs. Same Time Last Year,
January–June 2014
(three-month moving average)
Note: arrows indicate significant difference from all shoppers (95%
confidence level)
Source: Kantar Retail ShopperScape®, January–June 2014
© Copyright 2014 Kantar Retail
18
Amazon Shoppers Are “Smart” Shoppers
Prioritize getting a “good deal” over minimizing spending….
Also, purchasing high quality products, having stress-free shopping experience
What’s Important When Shopping?
(Percent of shoppers ranking factor as one of top four most-important factors while shopping)
64%
Feeling like I got a "good deal"
Spending as little money as possible
62%
Having as stress-free a shopping experience as
possible
55%
38%
Purchasing high-quality products
Having access to information about products or
brands
11%
45%
45%
40%
49%
Doing all or most of my shopping in one place
44%
27%
Having fun/enjoying myself
15%
19%
Interacting with helpful, friendly employees
Supporting retailers/brands that reflect my values
56%
13%
Completing my shopping as quickly as possible
Discovering new products or brands
66%
68%
10%
19%
17%
29%
All Shoppers
Amazon Shoppers
11%
Note: Box indicates Amazon shoppers as significantly higher than all shoppers; Arrow indicates significantly
lower(95% confidence level)
Source: Kantar Retail ShopperScape®, January- September 2014
© Copyright 2014 Kantar Retail
19
Tale of 3 Shoppers: AMZ = The “Smart” Shopper
WMT = minimize spend; TGT = feel good about the deal
What’s Important When Shopping?
(Percent of shoppers ranking factor as one of top four most-important factors while shopping)
Spending as little money as possible
Feeling like I got a "good deal"
43%
Doing all or most of my shopping in one place
Interacting with helpful, friendly employees
Discovering new products or brands
Supporting retailers/brands that reflect my values
Source: Kantar Retail ShopperScape®, January- September 2014
44%
45%
36%
Completing my shopping as quickly as possible
51%
28%
18%
17%
19%
16%
19%
11%
8%
11%
TGT
AMZ
37%
40%
40%
44%
WMT
WMT
11%
13%
10%
WMT
57%
56%
55%
Purchasing high-quality products
Having fun/enjoying myself
70%
66%
65%
Having as stress-free a shopping experience as
possible
Having access to information about products or
brands
62%
62%
70%
AMZ
32%
29%
TGT
18%
Target
Walmart
Amazon
© Copyright 2014 Kantar Retail
20
Amazon Shoppers Place Premium on Functional
Aspects of Shopping; Emotion also Over-Indexes
“Shopper DNA”: What Matters Most to Amazon Shoppers
All
Shoppers
Monthly
Amazon
Shoppers
Feeling like I got a “good deal”
Spending as little as possible
48%
45%
•
•
•
Having stress-free experience
Purchasing high-quality products
Having access to info about products/brands
22%
26%
Time
•
•
Completing shopping as quickly as possible
Doing all/most shopping in one place
20%
18%
Emotion
•
•
•
•
Having fun/enjoying myself
Supporting retailers/brands that reflect my values
Interacting with helpful, friendly employees
Discovering new products/brands
10%
11%
Shopper
Type
Top Priority When Shopping
Value/
Money
•
•
Function/
Experience
Note: Shading indicate significant difference between columns (95% confidence level)
Source: Kantar Retail ShopperScape®,,, January–September 2014
© Copyright 2014 Kantar Retail
21
Shopper Behaviors
© Copyright 2014 Kantar Retail
22
Shopper Behaviors
As Amazon continues to grow, its disruption to the retail landscape is intensifying.
Cross-shopping at Amazon is accelerating across all channels, including mass, club,
drug, category specialists, department stores, value discounters, and supermarkets.
• Cross-shopping at Amazon is accelerating. Amazon cross-shopping is growing at a
rapid pace. Walmart and Target each share more than half their shopper base with
Amazon, with several other retailers also vulnerable. As Amazon adds to its “everything
store” and vast selection, category specialists are most at risk. As Amazon continues to
build out their “newer” categories like grocery, apparel, and consumables, cross-shopping
will continue to accelerate in those channels.
• Amazon captures CE spending. As a leader in general merchandise, Amazon continues
to capture more spending from its shoppers in consumer electronics and media categories.
In 2013, 27% of shoppers started their search for their last CE purchase at Amazon. Gen Y
in particular is especially reliant on Amazon for CE, with 48% of Gen Y shoppers shopping
using Amazon as a CE destination.
• Apparel retailers are vulnerable to Amazon. Amazon now has the second-largest
regular apparel shopper base. Only Kohl’s has a larger total shopper base, but Amazon’s
monthly shopper exceeds Kohl’s and tops all other retailers. Many fashion retailers are
vulnerable to Amazon as they share a significant proportion of their shoppers with Amazon.
Source: Kantar Retail analysis
© Copyright 2014 Kantar Retail
23
Cross-Shopping at Amazon Is Accelerating
Retailers’ Monthly Shoppers Who also 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
2013
PPT Change
'07–'12
PPT Change
‘12–’13
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%
50%
64%
52%
62%
60%
57%
59%
59%
57%
75%
72%
66%
65%
65%
62%
65%
65%
63%
63%
84%
80%
77%
80%
52%
55%
54%
58%
51%
51%
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
3
3
4
3
4
4
2
4
4
5
3
0
3
4
3
2
3
3
5
5
2
4
10
2
6
5
3
6
6
Source: Kantar Retail ShopperScape®, January –December 2007, 2012, and 2013
Stealing shoppers from all types
of competition, with highest
amongst specialty players and
department stores
All shoppers more
likely to be shopping
Mass
Club
Drug
Cat. Specialists
Dept. Stores
Supermarkets
Value
© Copyright 2014 Kantar Retail
24
Amazon Most Likely to Capture Spending from Its
Shoppers in Media and CE Categories
“Capture Rate”: Percent of Amazon Shoppers Who Report
Spending the Most on Category at Amazon
Source: Kantar Retail ShopperScape®,,, July 2013–June 2014
© Copyright 2014 Kantar Retail
25
Amazon Driving Conversion to New Categories
Top shopped categories at Amazon
Top 5 Gift Purchases on Amazon
(among all holiday gift shoppers who shopped
Amazon.com)
1
2
3
4
Top 6 “Everyday” Purchases on Amazon
(during past 6 months, among All vs. Prime shoppers)
5
Source: Kantar Retail ShopperScape®, December 2013 and July 2014; Company website
© Copyright 2014 Kantar Retail
26
Amazon Attracting Shoppers in Core Gen Merch
Categories: CE and Apparel
Have Shopped Amazon in Past Year
for Consumer Electronics
Shop Amazon at Least Once a Year
for Apparel
Gen Y Shoppers
Gen Y Shoppers
All Shoppers
All Shoppers
Percent of Shoppers
Who Started Search
for Last CE Purchase
at Amazon:
2013: 27%
2014: 32%
65%
48%
54%
58%
Source: Kantar Retail ShopperScape®,,, January 2014 (left) and March 2014 (right)
© Copyright 2014 Kantar Retail
27
Fashion Retailers 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, Shoes, or
Accessories
62%
67%
Retailer’s Monthly Shoppers Who Shop at Amazon
Once a Month or More for Clothes, Shoes, or
Accessories
Total
Shopping
Incidence
64%
53%
44%
46%
40%
29%
22%
Source: Kantar Retail ShopperScape®,, March 2014
Note: Blue bars indicate significantly higher
difference than all shoppers (95% CL)
© Copyright 2014 Kantar Retail
28
Brand Position
© Copyright 2014 Kantar Retail
29
Brand Position: Amazon Is Key Trusted Source
As the world’s most “customer-centric” retailer, Amazon’s mission is focused on
innovating on behalf of the shopper. As its platform has evolved, Amazon has built a
reputation as not just a purchase-destination, but as a trusted source of information for
shoppers. From a search perspective at holiday, Amazon is a key resource for shoppers
looking for product reviews, gift ideas, and price comparisons.
• Amazon is a trusted brand and shopping destination. Amazon has established its brand
with shoppers based on its vast assortment and product information. As a leader in search,
Amazon has become a destination for not just purchasing, but pre-purchase research, from
product reviews to gift ideas. In fact, during the 2013 holiday season 46% of shoppers
compared prices on Amazon, while 34% read product reviews. Boomers especially leveraged
Amazon’s wish lists as part of their 2013 holiday shopping.
• Amazon Prime drives overall shopping behavior. Amazon Prime has been a key driver of
Amazon’s overall value proposition with its promise of free two-day delivery on more than 30
million eligible items. As of December 2013, nearly one in five households, or 21.5 million
shoppers, were members of Prime (or one in four households among Gen X and Y)—indicative
of the program’s growing importance to driving loyalty with the Amazon shopper that
encompasses the overall ecosystem, and goes well beyond transactions.
Source: Kantar Retail analysis
© Copyright 2014 Kantar Retail
30
What Resonates With Connected Shopper?
Amazon Prime is best-in-class: expanding into lives > retail
+
Paid membership loyalty program grounded in “all-you-can-ship”
Source: Kantar Retail analysis, Company website
© Copyright 2014 Kantar Retail
31
At the Core Is the Prime Member Relationship
Resonating across generations; ~One in Five U.S. Households
Penetration of Amazon Prime Membership
(among all U.S, primary household shoppers)
Membership
Dec 2011
Dec 2012
Dec 2013
Gen Y
17%
17%
24%
Gen X
14%
18%
24%
Boomers
7%
13%
17%
Seniors
5%
7%
10%
All
10%
14%
19%
Estimated
members:
21.5M
Note: arrows indicate significant difference vs. all shoppers (90% confidence level)
Source: Kantar Retail ShopperScape®, December 2011, 2012, 2013
© Copyright 2014 Kantar Retail
32
Membership Changes Behavior
Driving engagement & conversion
AVERAGE RATE ACROSS
ALL CATEGORIES
Online
Shopping Rate
Conversion
Rate
Online
Purchase Rate
9.6%
56%
5.7%
All Primary HH
Shoppers
1.7x
1.7x
Monthly Amazon
Shoppers
16.3%
55%
9.6%
Amazon Prime
Shoppers
15.8%
60%
9.9%
Source: Kantar Retail ShopperScape®, July 2014
© Copyright 2014 Kantar Retail
33
Amazon Became Top Holiday Destination
While most other retailer lose share of holiday shoppers
Top Retailers Shopped for Holiday Gifts
Note; Arrows indicate significant decline vs. holiday 2012 (95% confidence level)
Source: Kantar Retail ShopperScape®, December 2011, December 2012 and December 2013
© Copyright 2014 Kantar Retail
34
Amazon: Established Role in Holiday Routines
More than a purchase destination
How Shoppers Used Amazon as Part of Holiday Shopping
(top non-purchase uses)
Holiday
2012
Holiday
2013
Compared prices
48%
46%
Searched for gift ideas
37%
37%
Read product reviews
38%
34%
23%
22%
Purchased items from someone's Wish List
16%
16%
Viewed Lightning Deals/Deal of the Day
16%
14%
RESEARCH products not purchased on
Amazon.com
Note: Shading indicates significant difference vs. All Amazon Holiday Gift Shoppers (90% confidence level);
Source: Kantar Retail ShopperScape®, December 2012, December 2013
© Copyright 2014 Kantar Retail
35
Prime Tenure Influences Holiday Use
Broad Amazon usage ingrained into routines
Joined Prime during Prime member for
2013 holiday season 3 or more years
Sample size
180
133
Shopped during "Cyber Week" (the week after
Thanksgiving)
33%
46%
Shopped on "Black Friday" (the Friday after
Thanksgiving)
14%
34%
vs.
Shopped "Pre-Black Friday" deals
9%
25%
Checked price of an item on Amazon while I was
shopping in a retail store
9%
24%
Note: Shading indicates significant difference between columns (90% confidence level)
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
36
Gen X Most Actively Using Site Across Board
From “assurance” to deals; Boomers & Seniors leverage wish
lists—key trial, entry into the ecosystem
How Shoppers Used Amazon as Part of Holiday
Shopping, by Generation Indexed to all Shoppers
100 Index =
Average of all
shoppers
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
37
Trial & Purchase Experience Lends Itself to Habit
Particularly in a 1-click environment
“Purchased items [on Amazon] from someone’s Wish
List ”
% of Boomers
% of Seniors
More purposeful
shoppers
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
38
Growth Platforms
© Copyright 2014 Kantar Retail
39
Growth Platforms: Amazon Prime at the Core
Amazon Prime has helped to accelerate growth with its shoppers. This membership
program has moved beyond removing a key barrier to online purchasing to becoming a
much broader value-add program when combined with its content ecosystem. Variations
on the program tailored to various life stages, Amazon Mom and Amazon Student, helps
accelerate membership with core audiences and drive “share of life” with its members.
• Life stage programs drive loyalty. Amazon leverages its membership programs to cultivate
a loyal shopper base. The Mom, Subscribe & Save, and Student programs are designed to
provide relevant offers for shoppers in various life stages, and ultimately feed shoppers into
the Prime program. These life stages are critical opportunities when shoppers are more open
to establishing new shopping routines.
• Amazon Prime is the backbone of the Amazon value proposition. The remarkable growth
of Prime to an estimated 20.5 million members is indicative of the growing importance of the
program to the Amazon ecosystem. Prime is a key driver of cross-shopping on Amazon and
significantly changes the shopping patterns of its members. In 2013, 30% of Prime members
shopped retail stores less often and nearly half of all members check Amazon first before
anywhere else. On a loyalty basis, content users tend to be the most loyal Prime shoppers.
These shoppers are likely to renew for the exclusive digital content available with the
program.
Source: Kantar Retail analysis
© Copyright 2014 Kantar Retail
40
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)
Prime Music
Prime Pantry
15% 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
$99
3-month trial; $99 for
full membership
benefits (joining
Prime)
None
6-month trial; $49 for
full membership
benefits (joining
Prime)
Source: Company websites, Kantar Retail analysis
© Copyright 2014 Kantar Retail
41
Free Shipping Is Key Trigger …
Evolves into entertainment/“share of life”—connected places
Reason for Signing Up for Amazon Prime vs. Renewing Prime Membership
(among all primary household shoppers)
*Among Prime members who plan to renew, % who say factor is “very important” in their decision to renew
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
42
“Content Members” Likely to Be Most Loyal
Shoppers who join to get life stage–based discounts appear to
have narrower view of Amazon benefits
Likelihood to Renew, by Primary Reason for Joining
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
43
Membership Mentality Changes Shopping Patterns
Amazon-first mentality … turns trial into habit
How Prime Membership Changes Shopping Patterns
(among all Prime Members)
Only
of Prime members report NO
changes in shopping patterns
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
44
Significant Changes to Shopping Routines
Longest Prime members make most wholesale changes
The “Tenure Effect”: How Shopping Has Changed as Result of Being Prime Member
From the beginning: Amazon is top of
shopping list and visits to other stores
takes a hit … then effect is magnified
with tenure
3 or more years
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
45
Prime Effect: Retailers Most Likely to Be Impacted
As Amazon ecosystem drains share of life and wallet
Amazon Membership Incidence by Monthly Retailer Shoppers
Source: Kantar Retail ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
46
What Retailers Affected? In Shoppers’ Own Words
What retail stores or online shopping sites have you stopped shopping or
shop less since you’ve had an Amazon Prime membership?
One in five Prime
shoppers who have
reduced shopping at
other retailers cite
Walmart as a retailer
they are shopping less
often because of Prime
Note: Size of text represents relative frequency of mention in response to open-ended question above
Source: Kantar Retail analysis and ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
47
True Loyalty Beyond the Shopping Experience
Changes Frame of Reference for the Competition
I would say I go to Walmart
less often now that I have
Amazon Prime membership. It
is just more convenient to
shop at Amazon.com.
I have spent considerably less
at Walmart, because sometimes
Amazon has the best price
plus the free 2 day shipping with
prime, makes it a better option.
Target every few weeks
instead of every week.
Costco once a month
instead of twice.
Source: Kantar Retail analysis and ShopperScape®, December 2013
© Copyright 2014 Kantar Retail
48
Anne Zybowski
Vice President, Retail Insights
[email protected]
501 Boylston Street
Suite 6101
Boston, MA
02116
T +1 617 912 2856
www.KantarRetailiq.com
Nicole Santosuosso
Junior Analyst
[email protected]
501 Boylston Street
Suite 6101
Boston, MA
02116
T +1 617.912.2857
www.KantarRetailiq.com
© Copyright 2014 Kantar Retail