Study: One-third of discretionary income is now spent online
- One third of consumers' monthly discretionary income is now spent online, according to a new report from BigCommerce. The report also found that 39% of the global respondents to the survey went to the website of a brand before committing to buy a product in a brick-and-mortar store, and 33% went online to compare prices.
- The survey reported that over the last six months, 78% of respondents bought something on Amazon, while 65% purchased in a physical store, 45% on a branded online store, 34% on eBay and 11% on Facebook.
- While Amazon is the dominant player in e-commerce right now with 49% of the U.S. online spend, or 5% of all U.S. retail sales, other retailers can coexist with the online giant as complementary channels, the BigCommerce 2018 Omnichannel Buying Report said.
Despite the singular dominance of Amazon in e-commerce, the relationship between online and offline sales is becoming increasingly intertwined, noted BigCommerce in its 2018 Omnichannel Buying Report. Through its marketplace function, Amazon is also enabling many merchants to launch, grow and flourish in the online environment.
Amazon is a destination for product discovery and search, with 30% of shoppers seeing a brand on Amazon before buying on a brand’s website, the report said. Meanwhile 22% of shoppers went to a brand’s website before making the purchase on Amazon. This highlights "the complex relationship Amazon sellers have with the marketplace and the constant need to balance Amazon’s massive reach with the desire to elevate their own brand presence in consumers’ consciousness," according to report. "Increasingly, Amazon and a branded site work in tandem to ease a consumer through their purchase decision journey, and brands should be mindful of the role each play in the ultimate decision process – and use it to their advantage by selling in both channels."
With its fast and free shipping promise, Amazon Prime has deeply impacted the retail ecosystem, the report found. Shipping costs are now the least favorite part of online shopping for 18% of the survey respondents, while 15% complained about waiting for a product to be delivered.
Amazon has also changed the value equation for consumers. Price is not the primary reason to shop on Amazon anymore, as 28% of respondents prefer the site’s convenience to its low prices, per BigCommerce. In another significant change, brands have learned to better use product imagery, descriptions and customer reviews in promoting the value of a product, which leads many shoppers to buy more from a brand’s own website even if the product is being sold for less elsewhere.
Returns have also become a hot topic among retailers, with some cutting off shoppers who abuse the privilege. At the same time, returns can be a way for retailers to bridge the gap between the online and in-store experiences and create a sales opportunity. Over half of consumers expect they will return about 25% of e-commerce purchases, due in large part to the product failing to live up to the online descriptions. Fifty percent of those are sent back by mail or some other courier, but of those shoppers that go in-store to make a return 67% browse and shop the store while they are there.
Data breaches have been widely reported, as well as the extent that companies are using customer information they have harvested, so it is no surprise that consumers are very concerned about data privacy. But they are not so concerned that they are willing to sacrifice convenience in any major way. Consumers expect data collection will be an aspect of online and offline shopping, although 70% said that, if given the chance, they would opt out of data collection, the report said. Younger consumers – millennials, Gen X and Gen Z – are more willing to share their data if they get something worthwhile in return, such as discounts or free shipping.