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Amazon is the world’s second largest retailer behind Walmart, with $120 billion in US sales in 2017, up 71% in two years’ time. This one company accounts for approximately 40% of total US ecommerce sales. Its membership program, Amazon Prime, surpassed the 100 million member mark globally this year, and is viewed as the gold standard of membership programs. On top of that, more than four in 10 adults say that Amazon has redefined what convenience means from a shopping perspective and more than a quarter have higher expectations of other retailers now as a result. One third of consumers say Amazon is their favorite place to shop, and a fifth couldn’t live without it. Amazon offers a simple proposition that consumers want and are willing to pay for in the case of Prime: convenience, low prices, vast product selection, and fast delivery. Not only does it deliver on this value proposition repeatedly, earning high levels of customer satisfaction and trust, but it also continues to redefine convenience as it unapologetically forays into new territory. That is the “Amazon effect.”

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • Changes in Amazon shopping behavior
            • What you want to know
              • What we see
                • Amazon’s role in the purchase process
                  • What you want to know
                    • What we see
                      • The impact of Prime
                        • What you want to know
                          • What we see
                            • Consumer affinity for Amazon
                              • What you want to know
                                • What we see
                                  • The role of trust
                                    • What you want to know
                                      • What we see
                                        • Amazon’s vulnerabilities
                                          • What you want to know
                                            • What we see
                                              • What’s next?
                                              • Amazon Overview – What You Need to Know

                                                • “My favorite place to shop”
                                                  • Unmatched pace of growth
                                                    • A cut above the rest in nearly all areas
                                                      • Prime is Amazon’s most powerful tool
                                                        • Environmental responsibility and customer service not its strongest assets
                                                          • Never resting on its laurels
                                                          • Defining the Effect

                                                            • What is the “Amazon effect”?
                                                              • The effect on consumer behavior
                                                                • Figure 1: Amazon attitudes and perceptions, October 2018
                                                              • The effect on consumer expectations
                                                                • Figure 2: Shopping expectations and perceptions, October 2018
                                                              • The effect on competitors
                                                                • Where’s the tipping point?
                                                                • Amazon Scale

                                                                  • “Earth’s most consumer-centric company”
                                                                    • Figure 3: US net sales, 2015-17
                                                                  • Amazon = US ecommerce
                                                                    • Where Amazon excels
                                                                      • Overdelivers what online shoppers want
                                                                        • Figure 4: Amazon rating – Select above average attributes, October 2018
                                                                      • Drives loyalty through Amazon Prime
                                                                        • Invests in understanding its customers
                                                                          • Diversifies beyond retail
                                                                            • Figure 5: global net sales by product type, 2017
                                                                        • Amazon Prime Membership

                                                                            • 100 million subscribers and growing
                                                                              • Participation rates
                                                                                • Reasons for membership and benefits used
                                                                                    • Figure 6: Prime membership, October 2018
                                                                                  • High satisfaction keeps consumers loyal
                                                                                    • Figure 7: Prime membership satisfaction, October 2018
                                                                                    • Figure 8: Shopping attitudes, by Prime membership, October 2018
                                                                                  • Nonmembers don’t see value in exchange for fees
                                                                                      • Figure 9: Reasons for non-Prime membership, October 2018
                                                                                  • Opportunity Areas for Competing with Amazon

                                                                                    • Consumers would like Amazon to be more environmentally friendly
                                                                                      • Figure 10: Amazon ratings – Select average/below average attributes, October 2018
                                                                                    • Environmental and other corporate social responsibility
                                                                                      • Quality
                                                                                        • Customer service
                                                                                          • Other considerations
                                                                                            • Figure 11: Frustrations when shopping on Amazon, by heavy Amazon shoppers, April 2018
                                                                                            • Figure 12: Reasons for shopping less on Amazon, October 2018
                                                                                        • Key Initiatives

                                                                                            • Broad-based initiatives
                                                                                              • Physical store expansion
                                                                                                • Echos and “Alexa inside”
                                                                                                  • Delivery improvements
                                                                                                    • HQ2: A second US headquarters
                                                                                                      • Category-specific initiatives
                                                                                                        • Figure 13: Role of Amazon when shopping by category, October 2018
                                                                                                      • Amazon’s effect on toys and games
                                                                                                        • Figure 14: Amazon Toy Catalog, October 2018
                                                                                                      • Amazon’s effect on electronics
                                                                                                        • Amazon’s effect on beauty/personal care
                                                                                                          • Amazon’s effect on grocery
                                                                                                            • Amazon’s effect on apparel
                                                                                                            • The Amazon Shopper – What You Need to Know

                                                                                                              • Flocking to Amazon
                                                                                                                • High consumer favorability
                                                                                                                  • Attract, convert, repeat
                                                                                                                    • Trust is very high, but not implied
                                                                                                                    • Amazon Shopper Profile

                                                                                                                      • Synonymous with online shopping
                                                                                                                        • Figure 15: Shopping frequency, online in general versus on Amazon, October 2018
                                                                                                                      • A lock on young affluents
                                                                                                                        • Figure 16: Amazon shopping frequency, by age and income, October 2018
                                                                                                                      • Much more shopping on Amazon
                                                                                                                        • Figure 17: Shopping level versus a year ago, by Amazon shopping frequency, October 2018
                                                                                                                        • Figure 18: Reasons for shopping more, October 2018
                                                                                                                      • Attrition is low
                                                                                                                        • Figure 19: Reasons for shopping less, October 2018
                                                                                                                    • How Consumers Shop on Amazon

                                                                                                                      • The first stop
                                                                                                                          • Figure 20: Shopping behaviors, by Prime membership, October 2018
                                                                                                                          • Figure 21: Prime-specific shopping behaviors, October 2018
                                                                                                                          • Figure 22: Online shopping starting point for select categories, October 2018
                                                                                                                        • Amazon as personal shopping advisor
                                                                                                                            • Figure 23: Purchasing behaviors, by Amazon shopping frequency, October 2018
                                                                                                                        • Consumer Perceptions

                                                                                                                          • Addicted to Amazon
                                                                                                                              • Figure 24: Perceptions, by Prime membership and Amazon shopping frequency, October 2018
                                                                                                                            • Consumers’ emotional relationship with Amazon is actually mostly functional in nature
                                                                                                                                • Figure 25: Correspondence analysis – Principal map – Attributes, October 2018
                                                                                                                                • Figure 26: Attributes, October 2018
                                                                                                                              • How much is too much?
                                                                                                                                • Figure 27: Perceptions regarding power, by age and income, October 2018
                                                                                                                                • Figure 28: Amazon “Can You Feel It?” holiday TV ad, November 2018
                                                                                                                            • Trust in Amazon

                                                                                                                              • High levels of trust
                                                                                                                                • Figure 29: Trustworthiness, by Amazon shopping frequency and Prime membership, October 2018
                                                                                                                              • Third-party sellers not capturing halo effect
                                                                                                                                  • Figure 30: Trust of Amazon compared to third-party sellers, by Amazon shopping frequency and Prime membership, October 2018
                                                                                                                                  • Figure 31: Amazon storefront of the week featuring Lalabu, October 2018
                                                                                                                                • Trust should not be taken for granted
                                                                                                                                    • Figure 32: Trusted services, October 2018
                                                                                                                                    • Figure 33: Trusted services, by generation, October 2018
                                                                                                                                • Appendix – Data Sources and Abbreviations

                                                                                                                                  • Data sources
                                                                                                                                    • Sales data
                                                                                                                                      • Consumer survey data
                                                                                                                                        • Consumer qualitative research
                                                                                                                                          • Correspondence analysis methodology
                                                                                                                                            • Direct marketing creative
                                                                                                                                              • Abbreviations and terms
                                                                                                                                                • Abbreviations
                                                                                                                                                  • Terms
                                                                                                                                                  • Appendix – The Market

                                                                                                                                                      • Figure 34:, net sales by country, 2015-17
                                                                                                                                                      • Figure 35:, Global net sales by product type, 2015-17

                                                                                                                                                  About the report

                                                                                                                                                  This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                                                                  • The Consumer

                                                                                                                                                    What They Want. Why They Want It.

                                                                                                                                                  • The Competitors

                                                                                                                                                    Who’s Winning. How To Stay Ahead.

                                                                                                                                                  • The Market

                                                                                                                                                    Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                                                                  • The Innovations

                                                                                                                                                    New Ideas. New Products. New Potential.

                                                                                                                                                  • The Opportunities

                                                                                                                                                    Where The White Space Is. How To Make It Yours.

                                                                                                                                                  • The Trends

                                                                                                                                                    What’s Shaping Demand – Today And Tomorrow.

                                                                                                                                                  Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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