Stay ahead of the curve and future-proof your business with Mintel’s Amazon: Creating an Ecosystem Market Report 2023. Our full report is packed with consumer-led market intelligence, the latest online retail market trends and consumer behaviours affecting your business. Get a 360° view of the Amazon market, including market size, share and forecasted growth to help you align your business strategy with the needs of your audience.
Below, we’ve handpicked the key insights analysed in the full report and summarised the core topics.
Topics Analysed in this Report
- The impact of the cost-of-living crisis on Amazon shopper numbers and the impact on its business.
- An overview of the global Amazon business, including revenues and performance of key business units.
- Amazon’s position within the UK market, including market share.
- A profile of Amazon shoppers by key demographics and frequency of shop.
- Products purchased via Amazon in the past year by key category.
- Amazon Prime membership, including a profile of members and services used and barriers to enter the scheme from non-members.
- Amazon device ownership and how this impacts retail purchasing.
- Attitudes to price and convenience of shopping with Amazon as well as ethical and environmental considerations of shopping with the business.
Amazon Market Outlook
Amazon has become a byword for value, which will naturally drive shoppers to its platform during the cost of living crisis. However, inflationary pressures have also significantly reduced Amazon’s own profits as it faces rising costs across the business and rounds of job losses and a focus on profitable areas have seen the business take on an uncharacteristically defensive stance, at least in the short term.
- Amazon market opportunity: 73% of Amazon’s shoppers believe that it has better prices than most other retailers.
Amazon Trends, Opportunities and Challenges
Competition from other established players
Amazon is the dominant player in the online space and the UK’s largest non-food online retailer. However, growing competition within the marketplace space, from eBay and newer entrants like Superdrug, is Amazon’s biggest threat. More specialised marketplaces dealing in a particular category pose a threat to new seller acquisition for Amazon
Diving deeper into the ecosystem
For Amazon, continued growth will come from encouraging more of its customers to engage deeper into its ecosystem, such as owning an Amazon device or Prime membership. Growing this number allows Amazon to derive multiple revenue streams from a single shopper. However, Amazon cannot lose its focus on relentless innovation and value-adds to the Amazon experience of being a loyal member of the ecosystem.
- Amazon market opportunity: 30% of UK consumers who shop with Amazon are Prime members and have at least one Amazon-made device in their homes
To learn more about the UK Amazon Market, including a five-year forecast, consumer behaviour analysis, and market opportunities recommendations, purchase our full UK Amazon: Creating an Ecosystem Market Report.
Additional Features Included with Your Purchase
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- Mintel’s Clients Portal: Our portal provides instant access to actionable analysis, podcasts, and trend pieces relevant to your industry that are published almost daily, as well as our annual Global Consumer Trends. You can also browse our extensive catalogue of market research reports.
Expert Insights from the Retail Category Director
This report, written by Nick Carroll, the director of retail , delivers in-depth commentary and analysis to highlight trends in the online retail market and add expert context to the numbers.
Amazon has grown to be the largest non-food retailer within the UK and the dominant player within the online retailing market. Key to this success has been building an ecosystem, anchored by Amazon Prime, which ensures an element of loyalty and consistent purchasing for the retail operation. Due to strong value credentials the cost of living crisis has, and will, provide significant operation for Amazon but its enlarged size and now mature status means inflationary pressure is hitting Amazon’s bottom line just as hard as its shoppers.”
Nick Carroll
Category Director Retail Insights
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Overview
- Key issues covered in this Report
- Products covered in this Report
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Executive Summary
- Amazon: the business
- Growth slows as Amazon annualises COVID boost
- Figure 1: Amazon, total global net sales, 2017-22
- Mounting costs makes Amazon uncharacteristically defensive
- Figure 2: Amazon profits, 2016-22
- Services now the heart of the business?
- Figure 3: Breakdown of Amazon net sales by business segment, as a % of total sales, 2019-22
- Strong dollar weakens Amazon’s returns in Europe
- Figure 4: Geographic breakdown of Amazon revenues, 2019-22
- UK online market rebalances following peak pandemic-led demand in 2020 and 2021
- Figure 5: Market size for online retailing (including VAT), 2017-22
- In a declining market, Amazon grows its share
- Figure 6: Amazon reported sales and gross transactional revenues as a proportion of all online sales, 2017-22
- Amazon’s first clothing store
- Figure 7: Amazon’s first physical clothing store in the US, Amazon Style, 2022
- Virtual try-on: new way to shop
- Astro robot: built to carry out everyday tasks
- Figure 8: Amazon’s new robot, Astro, 2022
- The consumer
- Vast majority of consumers are Amazon shoppers
- Frequency eases a little, but Amazon still benefitting from the pandemic
- Figure 9: Frequency of Amazon shopping, 2019-22
- Electricals and hard-copy media see a decline year-on-year
- Figure 10: Products purchased via Amazon in the past year, 2021-22
- Mobile purchasing draws level with desktop
- Figure 11: Devices used to shop with Amazon, 2019-22
- Growth in mobile purchasing brings further threat for stores
- Figure 12: In-store Amazon price checking behaviour, 2022
- Prime membership grows, despite price rises
- Figure 13: Amazon Prime Membership, 2022
- Over a third of Prime members have joined in the past two years
- Figure 14: Length of Prime Membership, 2022
- Away from delivery, Video and Music are the major draws of Prime
- Figure 15: Amazon services used, 2022
- Price the biggest barrier to Prime
- Figure 16: Reasons for not being a member of Amazon Prime, 2022
- Nearly 60% of UK households own an Amazon device
- Figure 17: Ownership of Amazon devices, 2022
- Two thirds of Amazon shoppers believe it has the best prices
- Figure 18: Attitudes towards Amazon’s price, convenience and range, 2022
- Amazon environmental efforts getting through, but work still to be done
- Figure 19: Attitudes towards environmental and ethical concerns when shopping with Amazon, 2022
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Issues and Insights
- Greater demand but greater costs: Amazon in the cost-of-living crisis
- Is lack of innovation a concern?
- Gen Z and Amazon: the first generation to reject the ecosystem?
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Amazon: An Overview
- Growth slows as Amazon annualises COVID-19 boost
- Figure 20: Amazon, total global net sales, 2017-22
- Profits hit record highs during the pandemic
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- Figure 21: Amazon profits, 2016-22
- Services now the heart of the business?
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- Figure 22: Breakdown of Amazon net sales by business segment, as a % of total sales, 2019-22
- Figure 23: Amazon quarterly net sales growth, by business segment, 2021-22
- Strong dollar weakens Amazon’s returns in Europe
- Figure 24: Geographic breakdown of Amazon revenues, 2019-22
- Growth slows as Amazon annualises COVID-19 boost
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Amazon: In the UK Market
- The UK is Amazon’s second-largest market in Europe
- Figure 25: Estimated Amazon net B2C revenues and GTV sales, 2020-22
- Online market rebalances following peak pandemic-led demand in 2020 and 2021
- Figure 26: Market size for online retailing (including VAT), 2017-22
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- Figure 27: Online retail sales, share of sales by type of operation, 2018-22
- In a declining market Amazon grows its share
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- Figure 28: Amazon reported sales and gross transactional revenues as a proportion of all online sales, 2017-22
- Physical on pause
- The UK is Amazon’s second-largest market in Europe
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Amazon: Launch Activity and Innovation
- Interactive shopping
- Amazon’s first clothing store
- Figure 29: Amazon’s first physical clothing store in the US, Amazon Style, 2022
- Virtual try-on: new way to shop
- Amazon’s Luxury Stores comes to the UK
- Making life easier and better through devices
- Astro robot: built to carry out everyday tasks
- Figure 30: Amazon’s new robot, Astro, 2022
- Echo Show 15: stay organised, connected and entertained
- Figure 31: Echo show 15, 2022
- Kindle Scribe: note taking got easier
- Figure 32: Amazon’s Kindle Scribe, 2022
- Halo rise: improve the quality of sleep
- Figure 33: Amazon’s Halo Rise, 2022
- Amazon Glow: a new interactive video calling
- Figure 34: Amazon Glow, 2022
- Blink Video Doorbell: affordable home security
- Figure 35: Amazon Blink’s Video Doorbell, 2022
- Prime services: offering more for its members
- Buy with Prime
- Amazon Music: connecting fans to artists and providing more choice
- Extra perks for Prime member football fans
- Free Deliveroo delivery becomes an Amazon Prime perk
- Tapping into the financial services
- Figure 36: Amazon’s home insurance comparison site, 2022
- Sustainable deliveries
- Enhancing care home functionality
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Amazon: Advertising and Marketing Activity
- Above-the-line advertising spend drops 18%
- Figure 37: Amazon (UK) ltd: total above-the-line, online display and direct mail advertising expenditure, 2018-22
- Prime video streaming and downloading services account for half of above-the-line spend
- Figure 38: Amazon (UK) ltd: total above-the-line, online display and direct mail advertising expenditure by advertising category, 2018-22
- Digital and TV advertising spend dominate
- Figure 39: Amazon (UK) ltd: total above-the-line, online display and direct mail advertising expenditure by media type, 2018-22
- Nielsen Ad Intel coverage
- Above-the-line advertising spend drops 18%
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Who Shops With Amazon and How Frequently
- Vast majority of consumers are Amazon shoppers
- Frequency eases a little, but Amazon still benefitting from the pandemic
- Figure 40: Frequency of Amazon shopping, 2019-22
- Peak Amazon use comes from those aged 25-44
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- Figure 41: Frequency of Amazon shopping, by age, 2022
- Concerns for Amazon in engaging the youngest generation within the ecosystem
- Figure 42: Amazon shoppers, Prime members and device owners, by age, 2019 and 2022
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Products Purchased via Amazon
- Electricals and hard-copy media see a decline year-on-year
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- Figure 43: Products purchased via Amazon in the past year, 2021-2022
- Prime members over-index in shopping across all categories
- Figure 44: Purchases made via Amazon in the past year, by Prime membership status, 2022
- Broad range of categories shopped by Prime members
- Figure 45: Repertoire of categories shopped via Amazon in the past year, by Prime membership status, 2022
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Devices Used to Shop With Amazon
- Mobile purchasing draws level with desktop
- Figure 46: Devices used to shop with Amazon, 2019-22
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- Figure 47: Devices used to shop with Amazon, by age, 2019-22
- Growth in mobile purchasing brings further threat to stores
- Figure 48: In-store Amazon price checking behaviour, 2022
- Mobile purchasing draws level with desktop
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Amazon Prime Membership
- Prime membership grows, despite price rises
- Figure 49: Amazon Prime Membership, 2022
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- Figure 50: Frequency of Amazon shop, by Amazon Prime membership, 2022
- Over a third of Prime members have joined in the past two years
- Figure 51: Length of Prime Membership, by age, 2022
- Prime membership grows, despite price rises
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Barriers to Prime Membership
- Price the biggest barrier to Prime
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- Figure 52: Reasons for not being a member of Amazon Prime, 2022
- A boost to Prime video could engage some lapsed users, but price still key issue
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- Figure 53: Reasons for not being a member of Amazon Prime, 2022
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Amazon Services Used
- Away from delivery, Video and Music are the major draws of Prime
- Figure 54: Amazon services used, 2022
- For younger shoppers, Prime Video as much of a draw as delivery
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- Figure 55: Amazon services used, by age, 2022
- Restrictions to sharing could hurt long-term growth of Prime
- Away from delivery, Video and Music are the major draws of Prime
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Amazon Device Ownership
- Nearly 60% of UK households own an Amazon device
- Figure 57: Ownership of Amazon devices, 2022
- Prime members and non-members with access are more likely to own Amazon device
- Figure 58: Ownership of Amazon devices, by membership of Amazon Prime, 2022
- The majority purchased their products via Amazon
- Figure 59: Where Amazon products were purchased, 2022
- Nearly 60% of UK households own an Amazon device
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Price, Range, Convenience and Amazon
- Two-thirds of Amazon shoppers believe it has the best prices
- Figure 60: Attitudes towards Amazon’s price, convenience and range, 2022
- Convenience critical for younger shoppers
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- Figure 61: Attitudes towards Amazon’s price, convenience and range, by age, 2022
- Strong interest in an ‘Amazon Pharmacy’
- Figure 62: Attitudes to prescriptions and Amazon, by age, 2022
- Two-thirds of Amazon shoppers believe it has the best prices
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Ethical and Environmental Attitudes towards Shopping with Amazon
- Amazon environmental efforts cutting through, but work still to be done
- Figure 63: Attitudes towards environmental and ethical concerns when shopping with Amazon, 2022
- Sustainability initiatives cutting through, even if concern still exists
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- Figure 64: Attitudes towards environmental and ethical concerns when shopping with Amazon, 2022
- Over a fifth of Amazon shoppers believe they have received counterfeit products
- Figure 65: Attitudes towards fake/counterfeit products and Amazon, by age, 2022
- Amazon environmental efforts cutting through, but work still to be done
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Appendix – Data Sources, Abbreviations and Supporting Information
- Data sources
- Abbreviations
- Consumer research methodology
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