Online Shopping - US - June 2015
With a 16% CAGR (compound annual growth rate) from 2010-14, e-commerce is the engine of growth for retail, driving gains in excess of $500 million for 11 retailers in 2014 alone. At the same time, many e-tailers are having trouble profiting even on these high levels of topline growth, with Amazon, Etsy, Zulily, ThinkGeek, and CafePress reporting profit losses for 2014 or in the first quarter of 2015.
This report looks at the following issues:
- Buyers focused on price
- Wants beating needs
- Amazon’s grip tight
- Good times, lousy profits
While high levels of expenses among e-tailers are tied to consumer acquisition costs and product fulfillment, the disparity between income and profits suggests that sales are being buoyed by untenable pricing – a strategy driven by the 28% of online shoppers who always choose the lowest price retailer.
E-tailers (including both web-only and those with brick-and-mortar stores) need to be competitive on price points in order to draw sales, but sticking to bottom-of-the-barrel pricing as a retailer’s sole point of differentiation will eventually lead to insolvency. This report aims to help retailers find the solution to this quandary through quantitative and qualitative analysis of the market.
The report is inclusive of all online purchasing, whether the purchase is made on a PC, tablet, smartphone, or other device, with distinctions in purchasing habits via mobile devices covered in Mintel’s upcoming Mobile Advertising and Shopping – US, July 2015.
The focus of this report is on tangible objects that require pick-up or delivery: digital media, travel, entertainment tickets, insurance policies, and other intangible products are not the main subject of this report. Prescription drug sales are included in market size figures but are otherwise excluded.
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This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.
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