What you need to know
Amazon is the largest online retailer in the UK holding, as of 2017, a 23% share of all online retail sales. A book specialist turned general merchandiser, and more recently, grocery retailer, there are few retail sectors that have not felt the impact of Amazon and its army of marketplace sellers.
Amazon launched in the UK in 1998, and in twenty years the retailer has grown to become ubiquitous amongst online users’ shopping habits. In the year to October 2018, 86% of consumers shopped with the retailer, with 70% of these customers shopping at least on a monthly basis with Amazon.
With the vast majority of online users already using the site, Amazon’s growth, away from consumer electronics and cloud computing, is coming from encouraging existing customers to do more of their online shopping via the site. Indeed, 21% of Amazon shoppers say they have increased their use of the retailer in the past year, compared to just 13% who said they had used Amazon less.
Amazon Prime is central to this strategy of getting a greater return on existing customers. The scheme launched in the UK in 2007 and has since grown to encompass a vast range of perks including music and video streaming, alongside the now stock free next day delivery. Amazon has clearly created a tempting value proposition with Prime; in total 39% of consumers, rising to 63% of 16-24s, say they have access to Amazon Prime, with 26% personally being members and 13% sharing with someone else.
The benefits to Amazon of Prime, outside of the revenue the membership brings, is that Prime members are more frequent Amazon shoppers, more likely to shop across a range of categories, and more likely to own some form of Amazon-branded consumer electronics. In effect, Amazon is now deriving three revenue streams from certain customers, and this is why despite hitting a near ceiling in its ability to recruit new customers, it continues to grow its share and influence on the UK retail sector.
Products covered in this Report
This Report focuses on Amazon, and how consumers in the UK shop with the retailer as well as their attitudes towards the Amazon offering and its position in the market. To achieve this, it combines specially commissioned consumer research delving into how consumers interact with Amazon alongside brand research and market data to place Amazon into the context of the wider market.
For a broader look at the online retail market in the UK, see Mintel’s Online Retailing – UK, July 2018 Report.
