Table of Contents
Executive Summary
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- Amazon: structure, innovations and marketing
- Amazon sales top $177.9 billion (£138 billion) in 2017
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- Figure 1: Amazon net sales breakdown, 2017
- Amazon is the largest online retailer in the UK…
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- Figure 2: Amazon reported and gross transactional value revenues, 2015-18
- …disrupting most categories in the process
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- Figure 3: Amazon UK: estimated sales by product, 2017
- Opening up the purse strings
- Going physical
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- Figure 4: Amazon 4-star, New York City, September 2018
- Amazon ramping up its advertising expenditure
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- Figure 5: Total recorded above-the-line, online display and direct mail total advertising expenditure by Amazon (UK) Ltd, 2013-18
- The consumer
- Nearly nine in 10 shopped with Amazon in the past year
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- Figure 6: Changes in shopping levels via Amazon in the past year, October 2018
- Most (70%) shop with Amazon at least once a month
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- Figure 7: Frequency of shopping with Amazon, October 2018
- 39% of consumers have access to Amazon Prime
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- Figure 8: Ownership and access to Amazon Prime, October 2018
- Amazon’s core categories still most popular but 30% purchased fashion
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- Figure 9: What shoppers purchased via Amazon in the past year, October 2018
- Desktop/laptop site remains most used overall, but younger consumers more engaged in mobile
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- Figure 10: Devices used to shop with Amazon in the past 12 months, by age, October 2018
- Satisfaction levels high among shoppers, although customer service is a concern
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- Figure 11: Satisfaction with the Amazon shopping experience, October 2018
- Convenience, familiarity, and habit driving customers to Amazon
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- Figure 12: Behaviours of Amazon shoppers, October 2018
- Awareness of Amazon’s impact on the high street, but few let the bad press affect use
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- Figure 13: Attitudes towards Amazon’s impact on retailing, October 2018
- What we think
Issues and Insights
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- Amazon: destroying the high street or providing the platform for the next generation?
- The facts
- The implications
- Can you win against Amazon?
- The facts
- The implications
- Amazon: what is the next frontier?
- The facts
- The implications
Amazon: Structure and Innovations – What You Need to Know
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- Amazon sales top $177.9 (£138.0) billion in 2017
- Amazon is the largest online retailer in the UK, disrupting most categories in the process
- Opening up the purse strings
- Going physical
- Amazon ramping up its advertising expenditure
Amazon: An Overview
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- Amazon is still predominately a retailer…
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- Figure 14: Amazon, total net sales, 2013-18
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- Figure 15: Amazon net sales breakdown, 2017
- …but AWS is the quickest growing aspect of the business
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- Figure 16: Breakdown of Amazon net sales, as a percentage by business segment, 2015-17
- Amazon around the world
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- Figure 17: Breakdown of Amazon net sales, by region, 2017
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- Figure 18: Breakdown of Amazon net sales, as a percentage by region, 2015-17
- Amazon is becoming more profitable
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- Figure 19: Amazon, operating income, margins and net income, 2013-17
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- Figure 20: Amazon, net cash provided by (used in operating activities), 2013-17
Amazon in the UK Market
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- Amazon the biggest online player
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- Figure 21: Leading retailers share of all online sales, 2017
- Amazon accounts for less than 5% of all retail sales
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- Figure 22: Amazon reported and gross transactional value revenues, 2015-18
- Figure 23: Amazon reported sales and gross transactional revenues as a % of all online retail sales, 2015-18
- Electricals the biggest category by value
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- Figure 24: Amazon UK: estimated consolidated sales by product, 2017
Amazon: Launch Activity and Innovations
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- A willingness to invest
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- Figure 25: PillPack user interface, 2018
- Getting physical
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- Figure 26: Amazon products in Whole Foods Kensington, 2017
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- Figure 27: Amazon Go Seattle, 2016
- Figure 28: Amazon 4-star, New York City, September 2018
- Alexa finds her voice
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- Figure 29: Amazon Echo Show, 2017
- Going the extra (last) mile
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- Figure 30: Amazon Prime Air, December 2016
Amazon: Advertising and Marketing Activity
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- Amazon’s ad expenditure has jumped in the last three years
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- Figure 31: Total recorded above-the-line, online display and direct mail total advertising expenditure by Amazon (UK) Ltd, 2013-18
- TV and Cinema spending showing particular growth
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- Figure 32: Total recorded above-the-line, online display and direct mail total advertising expenditure by Amazon (UK) Ltd, by media type, 2014-18
- Retail, Prime, and CE the three core pillars of Amazon’s strategy
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- Figure 33: Total recorded above-the-line, online display and direct mail total advertising expenditure by Amazon (UK) Ltd, by percentage spent by product category, 2014-18
- Amazon increases its physical interactions with customers
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- Figure 34: Amazon Smile box, London July 2018
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- Figure 35: Amazon Fashion pop-up, Baker Street London, October 2018
- Nielsen Ad Intel coverage
Amazon: Brand Research
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- Amazon: brand overview
- Brand map
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- Figure 36: Attitudes towards and usage of selected brands, December 2018
- Key brand metrics
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- Figure 37: Key metrics for selected brands, December 2018
- Brand attitudes: online players excelling with online service
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- Figure 38: Attitudes, by brand, December 2018
- Brand personality: Amazon more likely to be seen as fun…
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- Figure 39: Brand personality – Macro image, December 2018
- …and responsive
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- Figure 40: Brand personality – Micro image, December 2018
- Brand analysis
- Amazon: a brand in rude health
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- Figure 41: User profile of Amazon, December 2018
The Consumer – What You Need to Know
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- Nearly nine in 10 shopped with Amazon in the past year
- Over a third have, or have access to, Amazon Prime
- Hardcopy media still the most popular category
- More 16-34s shop with Amazon via a mobile device than a laptop/desktop
- Satisfaction levels high overall among Amazon shoppers
- Amazon’s reach extends far past the online sector
- Awareness of Amazon’s impact on the high street, but few let the bad press effect use
The Amazon Shopper
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- Amazon usage is near universal across the demographic groups
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- Figure 42: Those who have shopped with Amazon in the past year, by age, October 2018
- A majority of Amazon shoppers use the site once a month
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- Figure 43: Frequency of shopping with Amazon, October 2018
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- Figure 44: Frequency of shopping with Amazon, by age, October 2018
- More have increased their shopping with Amazon than have reduced it
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- Figure 45: Changes in shopping levels via Amazon in the past year, October 2018
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- Figure 46: Frequency of shopping with Amazon, by changes in shopping levels with Amazon, October 2018
Amazon Prime Membership
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- Over a third have access to Amazon Prime…
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- Figure 47: Ownership and access to Amazon Prime, October 2018
- …rising to two thirds of 16-24s
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- Figure 48: Ownership and access to Amazon Prime, by age, October 2018
- Delivery remains key to Prime appeal, but Prime Video is growing
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- Figure 49: Amazon Prime services regularly used, October 2018
- A quarter of those who are not members have previously been so
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- Figure 50: Past membership of Amazon Prime, October 2018
- For non-members the main barrier is cost
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- Figure 51: Why consumers are not/no longer Amazon Prime members, October 2018
What They Buy Via Amazon
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- Hardcopy media still the most popular purchase
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- Figure 52: What shoppers purchased via Amazon in the past year, October 2018
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- Figure 53: What shoppers purchased via Amazon in the past year, by age, October 2018
- Effects of Prime on purchasing
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- Figure 54: What shoppers purchased via Amazon in the past year, by Prime membership status, October 2018
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- Figure 55: Repertoire of categories purchased via Amazon in the past 12 months, by Amazon Prime membership status, October 2018
- Prime membership also increases frequency of shopping
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- Figure 56: Amazon prime membership, by frequency of shopping via Amazon, October 2018
Devices Used to Shop with Amazon
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- Just under half shop with Amazon via a mobile device
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- Figure 57: Devices used to shop with Amazon in the past 12 months, October 2018
- Younger shoppers most likely to shop via mobile device
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- Figure 58: Devices used to shop with Amazon in the past 12 months, by age, October 2018
- Prime members more likely to shop via Echo
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- Figure 59: Devices used to shop with Amazon in the past 12 months, by Prime membership, October 2018
- Repertoire of ways of shopping with Amazon
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- Figure 60: Repertoire of methods of shopping with Amazon in the past 12 months, by age, October 2018
Satisfaction with the Amazon Shopping Experience
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- 90% of Amazon shoppers are satisfied with the shopping experience
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- Figure 61: Satisfaction with the Amazon shopping experience, October 2018
- Customer service an area of priority for Amazon
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- Figure 62: Key drivers of overall satisfaction with Amazon, November 2018
- Figure 63: Overall satisfaction with Amazon – Key driver output, November 2018
- Heavy users far more satisfied
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- Figure 64: Satisfaction levels with the Amazon shopping experience, by level of usage of Amazon, October 2018
- Methodology
Behaviours of Amazon Shoppers
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- Convenience, familiarity, and habit driving customers to Amazon
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- Figure 65: Behaviours of Amazon shoppers, October 2018
- The Amazon shopper in the physical world
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- Figure 66: Behaviours of Amazon shoppers, October 2018
- Price assumptions greater for heavy users
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- Figure 67: Those answering ‘yes’ to behaviours around Amazon shopping, by frequency of Amazon shopping, October 2018
Attitudes toward Amazon’s Effect on Retail
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- Bad press doesn’t affect a majority’s desire to shop with Amazon
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- Figure 68: Amazon.co.uk, screen capture, November 2018
- Figure 69: Attitudes towards Amazon’s impact on retailing, October 2018
- Frequent users more aware of Amazon’s impact
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- Figure 70: Agreement towards attitudes towards Amazon’s impact, by frequency of shopping via Amazon, October 2018
- Negative headlines regarding Amazon aren’t its problem, it’s the legislation
Amazon and Black Friday
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- Black Friday is an online-first event and this plays into Amazon’s hands
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- Figure 71: Black Friday shopping 2018, by retail channel, December 2018
- Nearly half of online Black Friday shoppers used Amazon
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- Figure 72: Retailers shopped with in-store/online during Black Friday 2018, December 2018
- Electricals top the Black Friday wish list
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- Figure 73: Products purchased during Black Friday 2018, by all Black Friday shoppers and by those who shopped with Amazon, December 2018
- Christmas purchasing key during Black Friday
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- Figure 74: Behaviours of Black Friday shoppers, December 2018
Why They Don’t Shop with Amazon
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- 14% didn’t shop with Amazon in the past year, but why?
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- Figure 75: Reasons for not shopping with Amazon in the past year, October 2018
Appendix – Data Sources, Abbreviations, and Supporting Information
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- Data sources
- VAT
- Financial definitions
- Abbreviations
- Consumer research methodology
Appendix – Key Driver Analysis
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- Interpretation of results
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- Figure 76: Overall satisfaction with Amazon – Key driver output, November 2018
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- Figure 77: Satisfaction with Amazon, November 2018
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