02.15.24
While Amazon maintains its position as the most-shopped brand for US online shoppers at 84%, per Mintel, some demographics, like Gen Z, have multifaceted and evolving opinions of the e-commerce giant.
Mintel data shows nearly half (47%) of Gen Z shoppers say they are actively trying to shop less at Amazon compared to 20% of Baby Boomers and 40% of Millennials.
Furthermore, six in 10 (60%) Gen Z shoppers agree that Amazon is "too powerful," and 39% are “tired of hearing about the e-commerce giant.”
A Preference For Personalization
As the leader in e-commerce, Amazon continues to gain market share. According to Mintel research, e-commerce sales are expected to reach $1.2 trillion in 2024 – a 9% increase over 2023. This expansion will continue, with a 36% increase anticipated over the next five years (2024-28), analysts say.
“The allure of Amazon continues to have a strong hold over most online shoppers. However, it may not always be the first choice for Gen Z shoppers,” Diana Smith, associate director, client advisor, retail and eCommerce, Mintel. “Their shopping habits indicate a preference for personalization over privacy. They are inclined to discover new brands, which may not always align with Amazon's mass appeal. Amazon and other mass merchandisers may need to rethink their Gen Z strategy to increase loyalty from this demographic. The key lies in understanding how this generation thinks, shops, and perceives the world around them, which points towards unique and tailored shopping experiences.”
Smith says retailers can remain competitive with Amazon by maintaining an active community presence through corporate social responsibility (CSR). Brands can adopt a local business mentality through meaningful CSR efforts. Smith encourages them to actively participate in the communities they serve, fostering customer involvement and lead efforts with “dedicated, genuine conviction.”
Loyalty Not a ‘Foregone Conclusion’
Amazon Prime membership has risen to an estimated 200 million worldwide, with 148.6 million (74%) in the US – an increase of 33% since 2020. While nearly three-quarters of adults (73%) say Amazon is their favorite place to shop, and the majority (65%) start their online shopping journeys with Amazon, consumers remain open to other options when it comes to their Prime membership. One-fifth (19%) of US adults say they would drop their Amazon Prime membership if another brand offered equivalent benefits. Americans are also using competitive services to a greater degree, including Netflix (46%) and Spotify (28%), and more than a third of Prime members (36%) are also Walmart+ members.
“Amazon Prime members only use three benefits on average, with Delivery, Video, and Music being the most popular,” said Smith. “Amazon should be more active in encouraging members to take full advantage of their Prime program. Loyalty isn't a foregone conclusion. The further entrenched members are in the ecosystem, the more likely they'll stay loyal. Amazon could likely convert some nonmembers by highlighting that the tangible value of all Prime benefits exceeds the annual fee. This can also help keep current members satisfied.”