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Online and Mobile Shopping - US - July 2011

For the purposes of this report, the online and mobile shopping market has been defined as follows:

This report covers sales to consumers of merchandise conducted via the internet or other online system (including email, instant messaging, and smartphone applications). It covers web-only (“pure-play” retailers) as well as the online operations of brick-and-mortar, catalog, or other retailers. These estimates implicitly include shopping via “apps” and smartphones. Broadly, the Census Bureau defines e-commerce as “the sale of goods and services where the buyer places an order, or the price and terms of the sale are negotiated over an Electronic Data Interchange, the Internet, or an other online system (extranet, email, instant messaging). Payment may or may not be made online.”

The figures used in this report specifically refer to business-to-consumer e-commerce. The Census Bureau estimates this based on certain assumptions as there is no way of definitively identifying which transactions are made for business purposes through retail venues that are open to the public.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Online sales continue to grow despite weak economy and declines in overall retail sales
                        • Broadband and increasing comfort with e-commerce driving growth
                          • Proliferation of mobile driving sales gains
                            • Most purchases made from a PC
                              • Resistance to buying consumables online slows sales growth
                                • Clothing, electronics, and entertainment sales driving growth
                                  • Amazon remains the dominant player
                                    • About one in four internet users made purchase in last 30 days
                                      • About four in 10 influenced by reviews
                                      • Insights and Opportunities

                                        • Growing number of consumers comfortable shopping online, but many require reviews to commit to buying a product
                                          • Figure 1: Trended opinions on how the internet impacts shopping, January 2004-December 2010
                                        • Twitter and blog influence on purchases
                                          • QR Codes
                                            • Affiliate marketing also driving sales
                                              • Recognizing the value of traffic
                                              • Inspire Insights

                                                  • Trend: Alpha Mothers
                                                    • Information management and research are parts of her skill set
                                                      • Relevant deals will help her make decisions
                                                        • Trend: Life Hacking
                                                          • My phone is the way to my pocketbook
                                                            • Securing space on the digital shelf
                                                            • Market Size and Forecast

                                                              • Key points
                                                                • Online sales far outpace offline retail growth
                                                                    • Figure 2: Total U.S. retail and e-commerce retail sales, at current prices, 2006-11
                                                                  • E-commerce sales expected to grow 10%+ per year between 2011 and 2016
                                                                    • Figure 3: Total U.S. e-commerce retail sales, at current prices, 2006-16
                                                                    • Figure 4: Total U.S. e-commerce retail sales, at inflation-adjusted prices, 2006-16
                                                                  • Fan chart forecast
                                                                      • Figure 5: Total U.S. e-commerce retail sales, at current prices, 2006-16
                                                                  • Market Drivers

                                                                    • Key points
                                                                      • Fixed broadband growth slows as wireless takes off
                                                                        • Figure 6: Total U.S. fixed broadband connections (more than 200 kbps), 2006-10
                                                                      • Smartphone penetration growing quickly
                                                                        • Figure 7: U.S. factory unit sales of smartphones, at current prices, 2006-10
                                                                      • Mobile internet use growing rapidly
                                                                        • Figure 8: Devices used to connect to the internet, 2006, 2008, and 2010
                                                                        • Figure 9: Total U.S. broadband connections (more than 200 kbps), by type, 2009 and 2010
                                                                      • Mobile data traffic expected to double each year between 2009 and 2013
                                                                        • Figure 10: Global mobile data traffic, 2008-13
                                                                      • Tablet sales could drive mobile shopping trend
                                                                        • Figure 11: U.S. sales to dealers and forecast of mobile PCs and eReaders at inflation-adjusted prices*, 2006-14
                                                                      • Most smartphone users surf the net and download apps
                                                                          • Figure 12: Usage of smartphone functionalities, by smartphone platform, November 2010
                                                                        • Low consumer confidence and high unemployment could stymie growth
                                                                          • Figure 13: Index of Consumer Sentiment, March 2007–May 2011
                                                                          • Figure 14: Unemployment, Jan. 2007-March 2011
                                                                        • Better websites lead to more e-commerce
                                                                        • Competitive Context

                                                                          • Key points
                                                                            • Many will still only shop at a store for staple goods
                                                                              • Figure 15: Products purchased only at a store, May 2011
                                                                            • Auto-replenishment
                                                                              • Auction and garage sale sites continue to compete with mainstream
                                                                                • Manufacturer sites vs. online retailers
                                                                                • Market Segmentation

                                                                                  • Key points
                                                                                    • Music/video and electronics top growth areas
                                                                                      • Food sales decline as more cook at home with fresh ingredients
                                                                                        • Figure 16: U.S. retail sales at electronic shopping and mail order houses, by type of merchandise, 2008 and 2009
                                                                                    • Leading Companies

                                                                                      • Key points
                                                                                        • Amazon maintains dominance with value, broad offering, and convenience
                                                                                          • Figure 17: Sales and related statistics of top 10 internet retailers, 2009
                                                                                        • Company profiles
                                                                                          • Amazon.com
                                                                                            • Amazon gets mobile
                                                                                              • Dell
                                                                                                • Staples
                                                                                                  • Apple
                                                                                                      • Figure 18: Apple.com ad, June 2011
                                                                                                    • Overstock.com: Positioned to take on the majors?
                                                                                                      • Groupon wins in deal of the day but faced with increasing competition
                                                                                                          • Figure 19: Groupon ad, June 2011
                                                                                                      • Innovations and Innovators

                                                                                                        • Amazon Local
                                                                                                          • Figure 20: Amazon Local Email, 2011
                                                                                                        • Cloud computing could drive profits for many online retailers
                                                                                                          • Discount Luxury: Gilt and Ruelala
                                                                                                            • Google Wallet
                                                                                                              • Square
                                                                                                                • ShopSavvy and mobile barcode readers could change the nature of retail
                                                                                                                • Marketing Strategies—Television Advertisements

                                                                                                                  • Overview
                                                                                                                    • Overstock uses television to communicate convenience and value
                                                                                                                      • Figure 21: Overstock.com television ad, 2010
                                                                                                                      • Figure 22: Overstock.com television ad, 2010
                                                                                                                    • Groupon and LivingSocial pitch exceptional value on discretionary items
                                                                                                                      • Figure 23: Groupon television ad, 2011
                                                                                                                      • Figure 24: LivingSocial television ad, 2011
                                                                                                                    • Netflix uses TV to communicate value of streaming video offering
                                                                                                                      • Figure 25: Netflix, television ad, 2009
                                                                                                                  • Marketing Strategies—Online and Digital Media

                                                                                                                    • Overview
                                                                                                                      • Amazon
                                                                                                                        • Figure 26: Amazon CRM –driven email following purchase 2011
                                                                                                                        • Figure 27: Amazon CRM –driven email following purchase 2011
                                                                                                                      • Amazon’s use of social media
                                                                                                                        • Twitter
                                                                                                                          • Facebook
                                                                                                                            • Dell.com
                                                                                                                              • Figure 28: Dell CRM –driven email following purchase 2011
                                                                                                                              • Figure 29: Dell CRM –driven email following purchase 2011
                                                                                                                            • Dell’s social media
                                                                                                                              • Twitter
                                                                                                                                • Staples
                                                                                                                                  • Facebook
                                                                                                                                    • Twitter
                                                                                                                                    • Weekly Incidence of Online Research and Purchase

                                                                                                                                      • Key points
                                                                                                                                        • Gathering information for shopping is most popular activity
                                                                                                                                          • Figure 30: Types of online shopping activities pursued in last seven and last 30 days, by household income, April-December 2010
                                                                                                                                        • Online shopping activities most popular with college grads
                                                                                                                                          • Figure 31: Types of online shopping activities pursued last seven and last 30 days, by level of educational attainment, April-December 2010
                                                                                                                                      • Incidence and Frequency of Online Purchases

                                                                                                                                        • Key points
                                                                                                                                          • 25-34 year olds frequent buyers
                                                                                                                                            • Figure 32: Frequency of online purchases, by age, May 2011
                                                                                                                                          • Those earning less than $50K most likely to have not bought online
                                                                                                                                            • Figure 33: Frequency of online purchases, by household income, May 2011
                                                                                                                                          • Larger households more likely to buy online
                                                                                                                                            • Figure 34: Frequency of online purchases, by household size, May 2011
                                                                                                                                          • 18-24s who shop online make more monthly purchases than older consumers
                                                                                                                                            • Figure 35: Number of online purchases made in the last 30 days, by age, April-December 2010
                                                                                                                                          • Shoppers with modest incomes tend to make frequent purchases
                                                                                                                                            • Figure 36: Number of online purchases made in the last 30 days, by household income, April-December 2010
                                                                                                                                        • Frequency of Using Internet for Shopping Research

                                                                                                                                          • Key points
                                                                                                                                            • 45-54s most frequently research products online
                                                                                                                                              • Figure 37: Frequency of researching purchases online in last 30 days, by age, April-December 2010
                                                                                                                                            • Those with household incomes of $75K+ more likely to research products online
                                                                                                                                              • Figure 38: Frequency of researching purchases online in last 30 days, by household income, April-December 2010
                                                                                                                                          • Online Shopping and Buying Preferences

                                                                                                                                            • Key points
                                                                                                                                              • Young adults more likely to be swayed by online reviews
                                                                                                                                                • Figure 39: Online shopping and buying preferences, by age, May 2011
                                                                                                                                              • Consumers from households with incomes of $75K+ place greater importance on free shipping
                                                                                                                                                • Figure 40: Internet shopping and buying preferences, by household income, May 2011
                                                                                                                                              • Many seek value through online coupons
                                                                                                                                                • Figure 41: Deal-seeking behaviors among online shoppers, by household income, May 2011
                                                                                                                                            • Frequency of Purchasing Gifts Online

                                                                                                                                              • Key points
                                                                                                                                                • 25-34 year olds most likely to buy a gift online
                                                                                                                                                  • Figure 42: Online gift buying, by age, May 2011
                                                                                                                                                • Consumers from households with incomes of $100K+ are more likely to make online gift purchases
                                                                                                                                                  • Figure 43: Online gift buying, by household income, May 2011
                                                                                                                                              • Major Reasons for Shopping Online

                                                                                                                                                • Key points
                                                                                                                                                  • Women more likely to cite avoiding hassle as reason for online shopping
                                                                                                                                                    • Figure 44: Major reasons for shopping online, by gender, May 2011
                                                                                                                                                  • 25-34 year olds are especially likely to cite ability to compare prices as a reason to shop online
                                                                                                                                                    • Figure 45: Major reasons for shopping online, by age, May 2011
                                                                                                                                                  • Those from households with incomes of 75K+ more likely to cite ease of finding exactly what they want
                                                                                                                                                    • Figure 46: Major reasons for shopping online, by household income, May 2011
                                                                                                                                                • Online vs. Offline Shopping

                                                                                                                                                  • Key points
                                                                                                                                                    • Many still reluctant to buy food online
                                                                                                                                                      • Figure 47: Products purchased only at a store, by gender, May 2011
                                                                                                                                                    • Older consumers particularly reluctant to buy online
                                                                                                                                                      • Figure 48: Products purchased only at a store, by age, May 2011
                                                                                                                                                    • Lower-income consumers less willing to buy online
                                                                                                                                                      • Figure 49: Products purchased only at a store, by household income, May 2011
                                                                                                                                                    • Most willing to buy presents, toys, and clothes either online or at a store
                                                                                                                                                      • Figure 50: Products purchased either at a store or online, by age, May 2011
                                                                                                                                                  • Online Purchasing Frequency by Device Type

                                                                                                                                                    • Key points
                                                                                                                                                      • Smartphones are least frequently used for purchases
                                                                                                                                                        • Figure 51: Frequency of online purchase on computers and phones, by age, May 2011
                                                                                                                                                      • Among those who purchase on a device, tablet is frequently used
                                                                                                                                                        • Figure 52: Average number of online purchases made in last week, May 2011
                                                                                                                                                    • Internet Shopping Attitudes

                                                                                                                                                      • Key points
                                                                                                                                                        • The internet has changed the way consumers gather product information
                                                                                                                                                          • Figure 53: How the internet has changed behaviors, by age, April-December 2010
                                                                                                                                                        • High-income households more likely to have been affected by internet in several areas
                                                                                                                                                          • Figure 54: How the internet has changed behaviors, by household income, April-December 2010
                                                                                                                                                        • College grads often influenced by online content
                                                                                                                                                          • Figure 55: How the internet has changed behaviors, by level of educational attainment, April-December 2010
                                                                                                                                                      • Internet Shopping Opinions

                                                                                                                                                        • Key points
                                                                                                                                                          • Privacy is a major concern for internet users
                                                                                                                                                            • Figure 56: Attitudes and opinions regarding internet usage, by age, April-December 2010
                                                                                                                                                          • Local info sites appeal to those with moderate to high incomes
                                                                                                                                                            • Figure 57: Attitudes and opinions regarding internet usage, by household income, April-December 2010
                                                                                                                                                          • College-educated consumers more interested in privacy
                                                                                                                                                            • Figure 58: Attitudes and opinions regarding internet usage, by level of educational attainment, April-December 2010
                                                                                                                                                          • Many require familiarity before making a purchase
                                                                                                                                                            • Figure 59: Internet shopping and buying behaviors, by household income, May 2011
                                                                                                                                                        • Impact of Race and Hispanic Origin

                                                                                                                                                          • Key points
                                                                                                                                                            • Blacks are least likely to have bought something online in past year
                                                                                                                                                              • Figure 60: Frequency of online purchases during the past year, by race and ethnicity, May 2011
                                                                                                                                                            • Asians and Hispanics most likely to have joined an online loyalty program
                                                                                                                                                              • Figure 61: Internet shopping and buying behaviors, by race and ethnicity, May 2011
                                                                                                                                                            • Blacks are least likely to search online for coupons
                                                                                                                                                              • Figure 62: Deal-seeking behaviors among online shoppers, by race and ethnicity, May 2011
                                                                                                                                                            • Asians most motivated by ability to compare prices online
                                                                                                                                                              • Figure 63: Major reasons for shopping online, by race and ethnicity, May 2011
                                                                                                                                                            • Asians are least resistant to buying products online
                                                                                                                                                              • Figure 64: Products purchased only at a store, by race and ethnicity, May 2011
                                                                                                                                                          • Cluster Analysis

                                                                                                                                                              • Mostly Offlines
                                                                                                                                                                • Demographics
                                                                                                                                                                  • Characteristics
                                                                                                                                                                    • Opportunity
                                                                                                                                                                      • Minor Middles
                                                                                                                                                                        • Demographics
                                                                                                                                                                          • Characteristics
                                                                                                                                                                            • Opportunity
                                                                                                                                                                              • Frequently Majors
                                                                                                                                                                                • Demographics
                                                                                                                                                                                  • Characteristics
                                                                                                                                                                                    • Opportunity
                                                                                                                                                                                      • Characteristic tables
                                                                                                                                                                                        • Figure 65: Online and mobile shopping clusters, April 2011
                                                                                                                                                                                        • Figure 66: Internet shopping and buying behaviors, by online and mobile shopping clusters, April 2011
                                                                                                                                                                                        • Figure 67: Deal-seeking behaviors among online shoppers, by online and mobile shopping clusters, April 2011
                                                                                                                                                                                        • Figure 68: Number of online purchases, by online and mobile shopping clusters, April 2011
                                                                                                                                                                                        • Figure 69: Reasons for shopping online, by online and mobile shopping clusters, April 2011
                                                                                                                                                                                      • Demographic tables:
                                                                                                                                                                                        • Figure 70: Online and mobile shopping clusters, by gender, April 2011
                                                                                                                                                                                        • Figure 71: Online and mobile shopping clusters, by age, April 2011
                                                                                                                                                                                        • Figure 72: Online and mobile shopping clusters, by household income, April 2011
                                                                                                                                                                                        • Figure 73: Online and mobile shopping clusters, by race, April 2011
                                                                                                                                                                                        • Figure 74: Online and mobile shopping clusters, by Hispanic origin, April 2011
                                                                                                                                                                                      • Cluster methodology
                                                                                                                                                                                      • Custom Consumer Groups

                                                                                                                                                                                        • Wireless internet users spend more time gathering information online
                                                                                                                                                                                          • Figure 75: Frequency of online information gathering, by type of internet access, May 2011
                                                                                                                                                                                        • Users of data plans more likely to make an online purchase
                                                                                                                                                                                            • Figure 76: Frequency of online purchasing, by type of internet access, May 2011
                                                                                                                                                                                          • Data users more likely than nonusers to visit a variety of e-commerce sites and purchase
                                                                                                                                                                                            • Figure 77: Online activities, by type of internet access, May 2011
                                                                                                                                                                                        • Appendix—Trade Associations

                                                                                                                                                                                          Companies Covered

                                                                                                                                                                                          • Amazon North America
                                                                                                                                                                                          • Amazon.com Inc
                                                                                                                                                                                          • Apple, Inc
                                                                                                                                                                                          • AT&T Inc.
                                                                                                                                                                                          • Barnes & Noble, Inc
                                                                                                                                                                                          • Best Buy stores (USA)
                                                                                                                                                                                          • CDW Corporation
                                                                                                                                                                                          • Cisco Systems, Inc.
                                                                                                                                                                                          • Consumer Electronics Association
                                                                                                                                                                                          • Costco Wholesale Corporation
                                                                                                                                                                                          • Craigslist
                                                                                                                                                                                          • Dell Inc.
                                                                                                                                                                                          • ESPN, Inc.
                                                                                                                                                                                          • Etsy
                                                                                                                                                                                          • Expedia Inc.
                                                                                                                                                                                          • Facebook, Inc.
                                                                                                                                                                                          • Federal Communications Commission (FCC)
                                                                                                                                                                                          • FreshDirect Inc
                                                                                                                                                                                          • Google, Inc.
                                                                                                                                                                                          • Groupon, Inc.
                                                                                                                                                                                          • HSN-U.S.
                                                                                                                                                                                          • Intel Corporation
                                                                                                                                                                                          • LivingSocial
                                                                                                                                                                                          • Macy's, Inc.
                                                                                                                                                                                          • Microsoft USA
                                                                                                                                                                                          • National Retail Federation (NRF)
                                                                                                                                                                                          • Netflix, Inc.
                                                                                                                                                                                          • Nigella Lawson
                                                                                                                                                                                          • Nintendo of America Inc.
                                                                                                                                                                                          • Office Depot (North America Retail)
                                                                                                                                                                                          • OfficeMax, Inc
                                                                                                                                                                                          • Overstock.com Inc.
                                                                                                                                                                                          • PayPal Inc.
                                                                                                                                                                                          • Procter & Gamble USA
                                                                                                                                                                                          • Research In Motion (USA)
                                                                                                                                                                                          • Safeway Inc
                                                                                                                                                                                          • Sears Holdings Corporation
                                                                                                                                                                                          • Shiseido International
                                                                                                                                                                                          • Staples, Inc
                                                                                                                                                                                          • T-Mobile USA
                                                                                                                                                                                          • Target Corporation
                                                                                                                                                                                          • The New York Times Company
                                                                                                                                                                                          • Turner Broadcasting System, Inc.
                                                                                                                                                                                          • Twitter, Inc.
                                                                                                                                                                                          • U.S. Bureau of Labor Statistics
                                                                                                                                                                                          • U.S. Bureau of the Census
                                                                                                                                                                                          • University of Michigan, The
                                                                                                                                                                                          • US Department of Commerce
                                                                                                                                                                                          • USA Today
                                                                                                                                                                                          • Verizon Communications Inc.
                                                                                                                                                                                          • Walmart Stores (USA)
                                                                                                                                                                                          • Washington Post Company (The)
                                                                                                                                                                                          • Yahoo! Inc
                                                                                                                                                                                          • YouTube, Inc.
                                                                                                                                                                                          • Zappos.com Inc.

                                                                                                                                                                                          Online and Mobile Shopping - US - July 2011

                                                                                                                                                                                          £3,277.28 (Excl.Tax)