Transcript Amazon: The New Disruptor

AMAZON: THE NEW DISRUPTOR
Presented by:
Anne Zybowski
Vice President, Retail Insights
January, 2013
Amazon Will Join Elite List of Global Retailers
@ #2… The New Disruptor
Global Retailers >$100B
2017E
1. Walmart
$587 B
2. Amazon
$157 B
3. Costco
$149 B
4. Tesco
$134 B
5. Seven & I
$130 B
6. Kroger
$127 B
7. Carrefour
$ 125 B
8. Schwarz Group
$106 B
9. Metro Group
$102 B
Source: Kantar Retail database and analysis
© Copyright 2013 Kantar Retail
2
Top Holiday Destination: Battle of Juggernauts
Amazon finishes strong with +7ppt, but Walmart
maintains lead with <1ppt difference
Note: arrows indicate significant difference vs. prior year (95% confidence level)
Source: Kantar Retail ShopperScape®, December 2009, 2010, 2011, and 2012
© Copyright 2013 Kantar Retail
3
Keep in Mind…
We are coming off of another Amazon recruiting season
Amazon's "Loyalty" Index
60%
(% of Past 4 Week Shoppers that Are Monthly Shoppers)
55%
52,6%
52,3%
57,1%
55,4%
54,8%
52,7%
48,8%
50%
46,8%
45,2%
45%
45,5%
42,7%
41,5%
40,1%
41,2%
40%
42,7%
41,2%
36,0%
37,7%
35%
34,1%
45,4%
34,1%
December = Highest traffic
month, but convert to monthly
30%
Source: Kantar Retail Shopperscape, December 2007 – October 2012
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4
Amazon Driving Share of Life…
Winning
shoppers one
category at a
time
members, as % of:
17%
18%
14%
13%
7%
All Primary
HH
Shoppers
Gen Y
Gen X
Boomers
Seniors
Read as: 28% of weekly Amazon shoppers are members of Amazon Prime.
Source: Kantar Retail analysis, and Kantar Retail ShopperScape®, December 2012
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5
Membership Has Its Rewards
Making a monetary commitment changes the way I think
about usage – and price
•Fixed margin
•Curated assortment
F

2% back
$(55/110) *
Maximize sunk costs!
•Low price
•“Widest” assortment
• No shipping fees
F

Kindle library
Instant videos
$(79) * 
• Spearfishing (speed to shop)
• Convenience (home delivery)
Source: Kantar Retail analysis
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6
Prime Loyalty: Membership Changes Behavior
Shopping
Rate
Conversion
Rate
Purchase
Rate
9.6%
46%
4.9%
All Primary HH
Shoppers
1.6x
1.7x
Monthly
Amazon
Shoppers
15.8%
48%
8.3%
Amazon Prime
Shoppers
18.8%
53%
10.9%
Source: Kantar Retail ShopperScape®, July 2012
© Copyright 2013 Kantar Retail
7
Competing with Amazon Share of Mind: Impact
31% of all Gen Y shoppers = weekly, 20% Gen X
Amazon.com Shopping Frequency by Generational Cohort
Total
Shopping
Incidence
77%
72%
74%
72%
61%
19% of monthly
Walmart shoppers
shop Amazon
weekly; 31% of
Gen Y Walmart
Read as: 31% of Gen Y shoppers shop Amazon.com on a weekly basis.
28% of weekly Amazon shoppers are Prime members
Source: Kantar Retail ShopperScape®, July 2012
27% of monthly
Target shoppers
shop Amazon
weekly; 39% of
Gen Y Target
© Copyright 2013 Kantar Retail
8
Shopper Need for Multi-Channel Solutions
While there are preferences, highly situational
“Store is better”
“Online is better”
Top 3 responses
64%
44%
38%
Top 3 responses
rd
1/3
36%
34%
31%
of shoppers don’t
have a preference
Being able to Feeling
Good
see/ interact confident that customer
with product I can return
service
an item
without much
hassle
Source: Kantar Retail ShopperScape®, September 2012
Completing
Having a
Having
my shopping stress-free access to a
as quickly as shopping wide variety
possible
experience of products
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9
Online Shopping & Purchasing Rates Vary
By category, but shopping & purchasing rates growing
% Shop Category*
% Purchase Category*
Women’s apparel
43.4%
E-books
Women’s apparel
Max
28.9%
26.5%
17.6%
Among All
Shoppers
Avg
Women’s apparel
16.0%
9.6%
9.7%
4.8%
Among
Amazon.com
Shoppers
Min
3.3%
Household Paper
6.1%
Fresh Food
2.1%
Min 1.0% Building
products
Building products
* 30 categories of detail shown in Appendix
Source: Kantar Retail ShopperScape®, August 2011-October 2012
© Copyright 2013 Kantar Retail
10
Digital Impact: 100%
Even if you don’t sell much online (today), the impact
extends well beyond eCommerce
Source: Kantar Retail analysis
© Copyright 2013 Kantar Retail
11
eCommerce Call to Action: Internal Sell
Likely underestimating the digital share of Sales… as
well as the digital Impact
What % of your company sales does online represent today?
55%
60%
40%
20%
20%
13%
6%
6%
0%
10%+
1
5-9%
2
Source: Kantar Retail analysis; 2012 Year-End Forum poll
1-4%
3
<1%
4
Unknown
5
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12
Let’s Focus on the 100% Impact
What is the risk if we don’t?
UK Camera specialist Jessops went into administration in January 2013; all of
its 200+ stores are now shuttered. Poignantly, one Jessops store displayed this
notice as its staff left the store for the final time…
(1% tax reference: Amazon, along with Starbucks, is one of the highest profile businesses
accused of avoiding corporation tax in the UK through being domiciled in Luxembourg).
Source: Kantar Retail analysis and store visits
© Copyright 2013 Kantar Retail
13
Anne Zybowski
Vice President, Retail Insights
[email protected]
245 First Street
Floor 10
Cambridge, MA
02142
P +1 617 588 4195
F +1 617 499 2723
www.KantarRetailiq.com
© Copyright 2013 Kantar Retail