The U.S. e-commerce market has managed to maintain and even build upon early pandemic shifts in consumer buying behavior. U.S. e-commerce sales are expected to cross the $1 trillion mark and hit $1.050 trillion by the end of 2022. Amazon.com is, of course, number one. Here are some insights.
87% of consumers are more likely to buy products from Amazon than other e-commerce sites, with 52% visiting Amazon daily or at least a few times a week. 75% of consumers say they check prices and product reviews on Amazon before making a purchase. Clearly, Amazon rules the eCommerce environment.
Despite the slow growth, U.S. marketplace e-commerce sales are still expected to hit $357.26 billion in 2022, making up 35% of all online sales. This is because more than half of U.S. adults shop online at least once a week, and 16% do so daily. Consequently, online shopping is still on the rise and moving to mobile, thanks to various technological advances making it easier for users to shop on their phones, dubbed “m-commerce.” It is estimated m-commerce will account for 44.2% of retail e-commerce sales in the U.S by 2025, totaling $728.28 billion.
Advances such as engaging mobile apps that can personalize experiences and safe, secure checkout from social apps are part of the m-commerce drivers. Still, the main driver is consumers’ reliance on digital devices, reaching its highest point before the pandemic. Consumers are glued to their phones, using them for everything from making purchases to watching videos.
Consumers Feel the Strain of Inflation and Budget Constraints; Choose Online Due to Price and Convenience
Earlier this year, inflation hit an all-time high of 9.1% in the U.S., eventually dropping to 8.4% in July, leaving consumers and businesses alike feeling the strain.1 Many have had to look at their budgets and cut unnecessary spending, with roughly two-thirds of consumers taking steps in July to save money in response to rising inflation.2 In fact, almost half of the shoppers say they buy more online than a year ago. This is especially true for Prime members, male shoppers, those in the $150K+ income group, and Older Millennials (53%).
Even though consumers are shopping more online, they have noticed a sharp increase in prices in most cases due to inflation, with 55% saying that prices have gone up. While outside reports state some high-income consumers are not as affected by inflation,1 Feedvisor’s survey shows that the consumers noticing the price hikes the most are Older Millennials and Gen X (63%).
Consumers spend more online, with 53% of shoppers saying they make an online purchase at least weekly, up slightly from last year, and nearly 10% make a purchase daily. Additionally, U.S. e-commerce spending in Q2 marked its fourth straight quarter of single-digit growth following the 45%-50% jumps during the first year of the pandemic, according to Digital Commerce 360.
As so many consumers embrace Amazon, it is no surprise that the online shopping leader is expected to account for 40% of all e-commerce sales in 2022 or nearly $2 in $5 spent online.
46% of consumers purchase Amazon weekly, while 6% make daily purchases from the marketplace. The numbers mirror last year’s percentages, showing how ingrained Amazon is now in consumers’ shopping journeys.
n addition to Amazon, 60% of consumers say they also purchase products from Walmart, down slightly from 63% last year. Walmart, Amazon’s closest rival, is expected to see a 14.6% growth in sales this year, faster than the overall U.S. e-commerce market, which is expected to expand by 14.1%.1 Despite the potential for inflation to hit profits, Walmart’s revenues beat analysts’ expectations in Q2 as its low grocery prices wooed a more comprehensive array of shoppers.
Consumers consistently choose Amazon as their go-to online shopping destination due to the assortment of products, customer service, search relevancy, and more.
The Three Drivers Influencing Consumer Purchase Behavior Today
Consumers Choose Products Based on Price and Value. During the height of the pandemic, name-brand goods were flying off the shelves, becoming out of stock within hours and causing many consumers to try private-label, white-label, and store-brand products. The cheaper of the two private label products often had the advantage of being both available and more cost-effective for financially constrained shoppers, yet carried the stigma of being “less than” brands because of their price. Consumers traditionally equate price with quality.
When asked about Amazon private label products, 76% of shoppers indicated they are more likely to purchase an Amazon private label product instead of a brand name product. This could be because of the pains Amazon has taken to ensure the quality of their private label products match that of the brand name products they are mimicking.
Advancements in Technology Are Enhancing Online Shopping Experiences and Convenience. As online shopping grows in popularity, retailers continue to develop new ways to make buying even more convenient for consumers that fit their needs and expectations. Consumers now expect an interactive shopping experience that provides convenience and the flexibility to purchase products quickly and safely. They want to explore product features virtually to ensure the right fit or use before spending, and they want these capabilities available throughout the shopping journey. To accommodate several new technology options have been adopted to oblige this shift of preference.
The Seamless Social Commerce Experience and Rewards for Loyalty. Consumers are spending more time on social platforms, with the average consumer spending two and a half hours daily on social media. These platforms have taken advantage of the increased engagement by providing commerce capabilities. Dubbed social commerce, this activity became quite popular during the pandemic as most shoppers were forced to stay inside and scroll their feeds instead of shopping in a mall. This habit appears to stick, as 52% of consumers surveyed reported purchasing from social media in the past six months.
Social purchasing behavior has become an integral driver of the “shoppability movement” as social feeds continue to move away from life updates and friend requests to in-app purchasing, product tagging, and product review sharing.