Amazon Strategies and the Amazon Shopper

 
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Published Aug 31, 2017 | 227 Pages | Pub ID: LA5916751

Amazon Strategies and the Amazon Shopper


Amazon’s growth has been propelled by a combination of increasing retail category depth and breadth; increasing depth and breadth of its Amazon Prime loyalty program; and technology innovation executed at a scale on par with the likes of Apple and IBM. Buoyed by these drivers, the retail colossus remains on a growth curve ordinarily reserved for much smaller companies: from apparel to prepared foods, more and more major retail categories are under threat from its advances; and with its acquisition of Whole Foods, game-changing multi-channel innovation lies just around the corner.

For participants in markets affected by its growth, understanding Amazon’s value proposition and its evolving relationship with the consumer across retail categories and channels is of paramount importance.  Amazon Strategies and the Amazon Shopper provides that insight in four parts: The Amazon Landscape; Amazon Category Analysis: Grocery; Amazon Category Analysis: Pet Products and Supplies; and Amazon Category Analysis: Financial Services.

This Packaged Facts report, Amazon Strategies and the Amazon Shopper, focuses on Amazon consumer usage and engagement trends and related consumer usage and engagement strategies, as well as Amazon’s competitive positioning over time. Focusing on Amazon products and services engagement over time, analysis includes portraits of the Amazon shopper, the Amazon media user, and the Amazon Prime member; as well as Amazon's numerous strategies to broaden its reach into U.S. homes and wallets, including segmented subscriptions, penetrating and deepening retail categories, expanding Alexa’s reach, moving into social media and multi-channel initiatives. Much attention is given to Amazon Prime, its relationship to the consumer, and the ways it is leveraged to drive engagement and increase sales.

Amazon Category Analysis: Grocery


This section focuses on online grocery purchasing trends over time to assess purchase channel (i.e. online and in-store) shifts and preferences according to major retailer and retailer channel, considering Amazon’s foray into the online grocery market. Analysis is devoted to the role Amazon plays in shaping grocery trends, with attention paid to Amazon cross-usage among major food retailers over time; consumer usage of Amazon services such as Amazon Fresh, Subscribe & Save and Prime Pantry; the effect of Amazon’s Whole Foods acquisition on the marketplace (including demographic synergies across market areas); and its effect on prepared foods such as fresh meal kits.

Amazon Category Analysis: Pet Products and Supplies


This section focuses on consumer pet products purchasing trends over time to assess purchase channel (i.e. online, in-store and multi-channel) shifts and preferences according to major retailer and retailer channel. As part of this focus, this report analyses retailer loyalty over time and share of spend by purchase channel. Analysis is devoted to the role Amazon plays in shaping these trends, with attention paid to Amazon cross-usage among major pet players over time, it’s influence on online, in-store and multi-channel purchasing preferences and pet spending allocation by purchase channel. The report also analyses Amazon Subscribe & Save, Amazon Fresh, and other features and services as they relate to the company’s approach to the pet product category.

Amazon Category Analysis: Financial Services


This section focuses on Amazon financial services and payments consumer usage and engagement trends and related consumer usage and engagement strategies, as well as Amazon’s competitive positioning over time. It also assesses future opportunities and ramifications related to its current financial services and payments products as well as those in development. Much attention is paid to the Amazon loyalty and value proposition, its relationship to these financial services and payments products, and their mutual relationship to Amazon Prime.

Report Scope


Amazon Strategies and the Amazon Shopper features demographic analysis that includes 1) household income segmentation of $150K-$249K and $250K+; and 2) geographical analysis by top fourteen designated market area, designated market area by segment, metropolitan area by segment, and county size. Analysis also includes:
  • Analysis of the Amazon products and services ecosystem
  • The influence of Amazon Prime membership on user engagement
  • Total retail and e-commerce sales projected through 2020
  • Consumer online shopping preferences
  • Online and mobile purchasing trends
  • Online and in-store purchasing trends by retail category
  • Historical trending of major retailer usage and Amazon user share
  • Demographic analysis of Amazon programs and services
  • e-Commerce sales and food & beverage e-commerce sales projected through 2020
  • Amazon food & beverage e-commerce sales projected through 2020
  • Historical trending of food retailer usage and Amazon user share
  • Demographic analysis of Amazon food-centric programs
  • The role rewards and loyalty play in Amazon’s credit card and ACH debit programs
  • Amazon-branded credit card purchase value market size and forecast through 2020
  • Consumer interest in possible Amazon financial services products
  • Analysis of Amazon’s non-credit card financial services and products, including small business lending, B2B e-commerce, social messaging, online checkout, in-store and multi-channel payments and voice commerce.
  • The influence of Amazon credit card possession on Amazon user payment method preferences
  • A comparison of online shoppers at five major retailers (Amazon, Walmart, Costco, Sam's Club and Target) regarding 1) checking account, savings account and card usage and 2) online payment preferences.
  • Consumer online and mobile checkout preferences
  • The implications of the Whole Foods acquisition on Amazon’s financial services and payments strategy
CHAPTER 1: EXECUTIVE SUMMARY
REPORT SCOPE
REPORT SUMMARY
THE AMAZON LANDSCAPE
e-Commerce feeds the beast
Online shopping preferences grease the wheels
Online and mobile purchasing habits broaden and deepen
Online category growth drivers
In-store purchasing category usage declines, but tapering may provide silver lining
Amazon: the nuts and bolts
The Amazon shopper & Amazon media user
The Amazon Prime shopper
The power of Prime
Broadening reach
Protecting the ecosystem: in-store browsing prohibited
Amazon versus the competition
AMAZON CATEGORY ANALYSIS: FINANCIAL SERVICES
The power of rewards and loyalty: Amazon financial services
Consumer interest in Amazon consumer financial services products
Amazon financial services moves
Alexa voice commerce
Checking account, savings account and card usage
Online payment method preferences
Online and mobile checkout preferences
AMAZON CATEGORY ANALYSIS: GROCERY
Sales forecast
Amazon versus the food and grocery competition today
Amazon Fresh product matrix
The Amazon Fresh user
The fresh factor: What consumers view as important
Interest in Amazon Fresh shows promise
Amazon Subscribe & Save
Prime Pantry
Multi-channel food retail: The Whole Foods acquisition
Meal kits
AMAZON CATEGORY ANALYSIS: PET PRODUCTS AND SUPPLIES
Online pet product sales growth
Key trends shaping the pet product and supplies industry
Amazon versus the pet products and supplies competition
Gauging the Amazon threat
Multi-channel pet product purchasing analysis
Pet product spend: multi-channel analysis
Amazon’s approach to the pet product category
CHAPTER 2: THE AMAZON LANDSCAPE
The Amazon effect
E-COMMERCE FEEDS THE BEAST
e-Commerce growth vs. overall retail sales growth
Table 2-1: Retail Sales: Total Sales and e-Commerce Sales, 2008-2017 (in billions and % growth)
Non-motor vehicle e-commerce growth vs. overall non-motor vehicle retail sales growth
Table 2-2: Retail Sales, Excluding Motor Vehicles: Total Sales and e-Commerce Sales, 2008-2017 (in billions and % growth)
e-Commerce 2016-2020 forecast
Table 2-3: Retail Sales: Total Sales and e-Commerce Sales Forecast, 2016-2020 (in billions and %growth)
Non-motor vehicle e-commerce 2016-2020 forecast
Table 2-4: Retail Sales, Excluding Motor Vehicles: Total Sales & e-Commerce Sales Forecast, 2016-2020 (in billions and % growth)
ONLINE SHOPPING
Factors important to shopping online
Table 2-5: Shopping for Household Products Online: Important Factors, 2017
Shipping
More consumers purchasing online and making more purchases online
Table 2-6: Online Purchasing in Last 30 Days: Purchase Frequency, 2008-2017
Mobile purchasing catching on
Table 2-7: Mobile Purchasing in Last 30 Days, 2014-2017
In-store purchasing shows signs of decline
Table 2-8: Percentage of Consumers Making In-Store Purchase in Last Three Months, 2008-2017
In-store category declines vary; recent trends suggest in-store retail resilience
Table 2-9: Percentage of Consumers Making In-Store Purchase in Last Three Months by Purchase Category, 2011-2017
Online category growth driven by food, cosmetics, pet, office supplies & home furnishings
Table 2-10: Percentage of Consumers Making Online Purchase in Last Three Months by Purchase Category, 2015-2017
AMAZON: THE NUTS AND BOLTS
Well past the $100 billion mark yet 20%+ growth continues
Sales: much more than selling products
Table 2-11: Amazon Product and Services Sales, 2014-2016 (in billions and % growth)
Retail and web services segmentation
Table 2-12: Amazon North American Sales, 2014-2016 (in billions and % growth)
Feeding the beast
THE AMAZON SHOPPER
Table 2-13: Percent of Adults Who Have Purchased from Amazon, 2014-2017
Table 2-14: The Amazon Shopper by Demographic, 2017
Demographic drivers
Table 2-15: The Amazon Shopper: Age by HH Income, 2017
Table 2-16: The Amazon Shopper: Population Density by HH Income, 2017
Table 2-17: The Amazon Shopper: Married with Children by HH Income, 2017
AMAZON PRODUCTS AND SERVICES USAGE FOOTPRINT
Shipping, cards, readers, subscriptions and media galore, and more
Table 2-18: Amazon Products and Services Used, 2015, 2016 and 2017
Media and video: Amazon against the competition
Table 2-19: Usage of Streaming Media Devices and Video Services by Type, 2017
Music and reading: Amazon against the competition
Table 2-20: Usage of Streaming Media Devices and Video Services by Type, 2017
Amazon Drive
AMAZON PRIME
Own Prime, own the world?
Prime benefits
Amazon products and services timeline
Table 2-21: Amazon Product/Service Timeline, 2005-2014
Table 2-22: Amazon Product/Service Timeline, 2015-2017
A value wallop
Surpassing 80 million members
The Amazon Prime shopper
Table 2-23: The Amazon Prime Shopper by Demographic, 2017
Table 2-24: The Amazon Prime Shopper by Demographic, 2016-2017
THE POWER OF PRIME
Prime users: Increased products and services engagement among touchpoints open to all
Table 2-25: Amazon Products and Services Used: Prime vs. Non-Prime Users, 2017
Prime users: increasing engagement with Prime features over time
Table 2-26: Amazon Prime Products and Services Used, 2015, 2016 and 2017
Prime users: average number of Prime benefits used increases over time
Table 2-27: Amazon Prime Members: Products and Services Used, 2015, 2016 and 2017
Prime users: More frequent purchasers
Table 2-28: Amazon Purchase Frequency Comparison: Amazon Prime Members vs. Non-Members,2017
Prime users: heavier spenders
Prime products and services: demographic analysis
Table 2-29: Amazon Prime Products and Services: Indexed Usage by Demographic, 2016-2017
Amazon Prime Day
BROADENING REACH: SEGMENTING SUBSCRIPTIONS
Amazon Family
Amazon Prime Student and Amazon @ Your University
Amazon Allowance
Amazon Prime for lower-income consumers
BROADENING REACH: GROWING AND ADDING RETAIL SEGMENTS
Consumer packaged goods
The Amazon Subscribe & Save connection
Key Subscribe & Save demographics
Table 2-30: The Amazon Subscribe & Save User: Key Demographics, Category, 2016-2017
Amazon Subscribe & Save retail category penetration
Table 2-31: Amazon Subscribe & Save Usage by Product Category, 2016-2017
Apparel
Furniture
BROADENING REACH: INTO THE TELEVISION
BROADENING REACH: ENTERING SOCIAL MEDIA
BROADENING REACH: POKING ITS HEAD INTO NEW ADVERTISING SEGMENTS?
BROADENING REACH: IS A WIRELESS NETWORK NEXT?
BROADENING REACH: ALL THINGS ALEXA
“Okay, Google”; “Hey, Siri”; . . . or just “Alexa”?
Eye-popping opportunity
Just getting warmed up: Alexa Deals
BROADENING REACH: MULTI-CHANNEL SHOPPING
Table 2-32: Percentage of Consumers Making Online Purchase in Last Three Months: Top 25 Retailers, 2015-2017
Amazon multi-channel initiatives
Protecting sales: in-store browsing prohibited
AMAZON VERSUS THE COMPETITION
Walmart holds the purchase usage crown but will cede it to Amazon next year
Table 2-33: Amazon vs. Major Retailers: Purchasers, 2014 vs. 2017
Major retailers: cross-usage of Amazon over time
Table 2-34: Major Retailers: Purchasers and Purchasers Shopping at Amazon, 2014 vs. 2017
Table 2-35: Amazon vs. Major Retailers: Indexed Usage by Gender, Age & HH Income Segments, 2017
Table 2-36: Amazon vs. Major Retailers: Indexed Usage by Top Designated Market Area and Retailer,
2017
Table 2-37: Amazon vs. Major Retailers: Indexed Usage by Metropolitan Area Grouping and Retailer,
2017
Table 2-38: Amazon vs. Major Retailers: Indexed Usage by County Size and Retailer, 2017
Walmart: the in-store retail leader fights back
CHAPTER 3: FINANCIAL SERVICES
Financial services as key
Table 3-1: Amazon Financial Services and Products, 2017
THE POWER OF REWARDS AND LOYALTY: AMAZON FINANCIAL SERVICES
Prime Rewards
Amazon Prime Reload
Amazon credit cards
Table 3-2: Amazon Purchase Frequency Comparison: Amazon Prime Users and Amazon Credit Card Users by Card Type, 2017
Table 3-3: Payment Options Used and Used Most When Purchasing from Amazon, 2016
Table 3-4: Payment Options Used and Used Most When Purchasing from Amazon: Amazon Store Card Users, 2016
Amazon-branded credit card growth
Table 3-5: Amazon Credit Cards: Purchase Value and Share of U.S. Net Sales, 2015-2020 (in billions and % growth)
Table 3-6: Amazon Credit Card Purchase Value by Card Type, 2015-2020 (in billions and % growth)
Table 3-7: Amazon Rewards Visa and Amazon Store Card Usage, 2015, 2016 and 2017
CONSUMER INTEREST IN AMAZON CONSUMER FINANCIAL SERVICES PRODUCTS
Table 3-8: Interest in Amazon Financial Services and Products by Type, 2016
Table 3-9: Interest in Amazon Financial Services and Products by Type: Prime vs. Non-Prime &
Amazon Credit Card Holders, 2016
LEADERSHIP IN EXPERIMENTATION
Amazon Anytime
DIGITAL WALLET MOVES
Pay with Amazon
Table 3-10: Consumer Purchase Methods on the Internet, 2014
IN-STORE PAYMENT MOVES
Amazon Pay Places
Amazon Go and Whole Foods
UNBANKED AND UNDERBANKED MOVES
Amazon Cash
Amazon Prime for lower-income consumers
LENDING MOVES
Amazon Lending
Whole Foods
Table 3-11: Reasons for Choosing Primary Bank, 2016
Installment payments: a PayPal Credit alternative?
B-2-B MOVES
ALEXA VOICE COMMERCE
Financial services ramifications and opportunities
For now, just the building blocks
ONLINE PAYMENT METHOD PREFERENCES
Credit cards are consumers’ online payment method of choice; PayPal firmly established
Table 3-12: Online Payment Methods Used by Type, 2014-2016
Differences in online payment methods used by major retailer
Table 3-13: Online Payment Methods Used by Type and Major Retailer, 2017
CHECKING ACCOUNT, SAVINGS ACCOUNT AND CARD USAGE
Table 3-14: Online Shoppers: Checking Account, Savings Account and Card Usage by Type, 2017
ONLINE AND MOBILE CHECKOUT PREFERENCES
Checkout button usage by brand
Table 3-15: Checkout Button Usage by Brand, 2016
CHAPTER 4: FOOD PRODUCTS
GROCERY SALES TRENDS
U.S. food at home sales trends, by channel
Table 4-1: Food at Home Sales, by Type of Outlet: 2007 vs. 2016
U.S. online grocery sales trends
Table 4-2: e-Commerce Sales: Total Sales and Food and Beverage Sales, 2008-2017
Table 4-3: e-Commerce Sales: Total Sales and Food and Beverage Sales, 2016-2020 (in billions and percentage growth)
Table 4-4: Online Food & Beverage Sales: Total Sales and Amazon Sales, 2015-2020 (in billions and percentage growth)
Supermarkets continue to reign but online penetration approaches drug store and c-stores
Table 4-5: Grocery/Fresh Food Purchasing Channels, 2017
AMAZON VERSUS THE FOOD AND GROCERY COMPETITION
Major food retailers: cross-usage of Amazon over time
Table 4-6: Supermarkets and Food Stores Shopped in Last Four Weeks: Usage and Share Purchasing
from Amazon, 2014 vs. 2017
Table 4-7: Amazon vs. Non-Amazon Shopper Population by Supermarkets/Food Stores Shopped, 2017 .. 152
Table 4-8: Amazon vs. Major Supermarket and Food Retailer Usage Indexes, by HH Income Segments,2017
Table 4-9: Amazon vs. Major Supermarket and Food Retailer Usage Indexes, by Age, 2017
Table 4-10: Amazon vs. Major Supermarket and Food Retailer Usage Indexes, by County Size, 2017
AMAZON FRESH
Amazon Fresh Pickup
AMAZON FRESH PRODUCT MATRIX
Table 4-11: Amazon Fresh: Purchase Choices, by Category 2017
Table 4-12: Amazon Fresh: Purchase Choices, by Category 2017
Making an organic effort
Table 4-13: Amazon Fresh: Organic Purchase Choices, Selected Categories, 2017
Table 4-14: Amazon Fresh: Organic Purchase Choices, Selected Categories, 2017
The Amazon Fresh user
Table 4-15: The Amazon Fresh User: Key Demographics, Category, 2016-2017
The fresh factor: What consumers view as important
Table 4-16: Factors Influencing Fresh Produce, Meat or Seafood Shopping, 2016
Interest in Amazon Fresh shows promise
Table 4-17: Interest in Amazon Fresh, by Demographic, 2016
Fresh Deals
AMAZON SUBSCRIBE & SAVE
The Amazon Subscribe & Save user
Subscribe & Save retail category penetration
Table 4-18: Amazon Subscribe & Save Usage, By Product Category, 2016-2017
PRIME PANTRY
Table 4-19: Amazon Prime Pantry, Purchase Choices, by Category, 2017
MULTI-CHANNEL FOOD RETAIL: THE WHOLE FOODS ACQUISITION
Table 4-20: Whole Foods, By the Numbers, 2014-2016
Table 4-21: Amazon, Whole Foods and Online Grocery Shoppers: Usage Indexes, by Demographic,2017
Table 4-22: Amazon, Whole Foods and Online Grocery Shoppers: Usage Indexes, by Top Designated
Market Area, 2017
Table 4-23: Amazon, Whole Foods and Online Grocery Shoppers: Usage Indexes, by County Size and
Metropolitan Area, 2017
Primed for online grocery?
Table 4-24: Weekly Shoppers, Top 15 Supermarkets/Food Stores: Online Grocery Shopping Indexes,2017
Primed to spend?
Table 4-25: Weekly Shoppers, Top 15 Supermarkets/Food Stores: Share of Use, by Weekly Grocery Spending, 2017
MEAL KITS
Why meals kits make sense for Amazon
Table 4-26: Fresh Meal Kit Delivery Usage: Online Grocery Shoppers, Amazon Users, Amazon Prime Users, and Amazon Fresh Users, 2017
How Amazon will put the heat on other providers
Table 4-27: Fresh Meal Kit Delivery Usage: Online Grocery Shoppers, Amazon Users, Amazon Prime Users, and Amazon Fresh Users, 2017
Launch underway
CHAPTER 5: PET PRODUCTS
Industry structure
Sales trends
Usage trends
Table 5-1: Percentage of Consumers Making Online Purchase in Last Three Months, Top Five GrowthbCategories, 2015-2017
Key trends shaping the pet products industry
AMAZON VERSUS THE PET PRODUCTS COMPETITION
2011-2017 pet supply purchasing trends, by retailer and channel
Table 5-2: Pet Supply Purchasers, by Channel, 2011-2017
Loyal purchasers hold steady even while number of stores shopped increases
Table 5-3: Pet Supply Purchasers: Average Number of Channels Used and Loyal Purchasers, 2011-2017
Sole-channel pet supply purchasers
Table 5-4: Sole-Channel Pet Supply Purchasers, by Channel, 2011-2017
Online pet product/supply purchasing gaining traction; online-only is another matter
Table 5-5: Sole Channel Pet Supply Purchasers, by Channel, 2011-2017
The Amazon threat
Table 5-6: Amazon vs. Petco and PetSmart: Purchasers and Purchasers Shopping at Amazon, 2014 vs.2017
Table 5-7: Amazon vs. Petco and PetSmart: Online Purchasers and Online Purchasers Shopping at Amazon, 2017
Table 5-8: Pet Supply Purchasing Indexes by Channel vs. Amazon Purchasers, by Age, HH Income Segments and County Size, 2017
Table 5-9: Pet Supply Purchasing, by Channel: Amazon Users vs. Non-Users, 2017
Sole-channel pet product and supply purchase channels used: Amazon users vs. non-users
Table 5-10: Sole Channel Pet Supply Purchasers, by Channel: Amazon Users vs. all Pet Owners, 2017
MULTI-CHANNEL PET PRODUCT PURCHASING ANALYSIS
In-store, veterinarian and online pet product purchasing
Table 5-11: Pet Product Purchases: In-Store, Online, and Veterinarian,2017
In-store only vs. online-only pet product purchasing
Table 5-12: Pet Product Purchases: In-Store, In-Store Only, Online, and Online Only, 2017
The big picture: usage across channels
Table 5-13: In-Store/Online, In-Store and Online Pet Product Purchases: Brick and Mortar and
Internet Retailers, 2017
Brick and mortar players
Table 5-14: Brick and Mortar Retailers: In-Store/Online, In-Store and Online Pet Product Purchases,2017
Table 5-15: Brick and Mortar Retailers: In-Store Pet Product Purchasers, In-Store-Only Share, 2017
Table 5-16: Brick and Mortar Retailers: Online Pet Product Purchasers, Online-Only Share, 2017
Internet-only players
Table 5-17: Online Pet Product Purchases, by Internet Retailer, 2017
Table 5-18: Amazon Pet Product Purchasers: Multi-Channel Pet Product Shopping, by Major Retailer,2017
PET PRODUCT SPEND: MULTI-CHANNEL ANALYSIS
Table 5-19: Share of Pet Product Spending, In-Store, Online and Other, 2017
The Amazon connection
Table 5-20: Multi-Channel Pet Product Spending Share: Amazon Pet Product Purchasers, 2017
Table 5-21: Multi-Channel Pet Product Spending Share, by Brick and Mortar Retailer, 2017
AMAZON PET PRODUCTS MATRIX
Amazon pet products
Table 5-22: Amazon Dog Products: Purchase Choices, by Category and Amazon Program, 2017
Table 5-23: Amazon Cat Products: Purchase Choices, by Category and Amazon Program, 2017
AMAZON SUBSCRIBE & SAVE
Pet product subscription services
Table 5-24: Online Pet Product Purchasers and Subscription/Auto-Ship Orders, by Internet Retailer,2017
Amazon Subscribe & Save
Table 5-25: Amazon Subscribe & Save Usage, By Product Category,2016-2017
AMAZON FRESH
Elbow butter in Amazon Fresh? Genius!
FreshPet front and center
Private label pet? Not yet
APPENDIX
TABLE INDEXES

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