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US Competing with Amazon Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Competing with Amazon market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

This Report will look at why consumers shop on Amazon, how consumers perceive Amazon, the impact Amazon’s membership program (Amazon Prime) has on consumers’ decision to shop with Amazon as well as shop elsewhere. It will also offer insight as to what opportunities lie for retailers to win and retain online shoppers as well as coverage of how other retailers are aiming to compete with Amazon.

This Report builds on the analysis presented in Mintel’s How Consumers Discover Products Online – US, April 2018 as well as Mintel’s Why Consumers Build and (Sometimes) Abandon Online Shopping Carts – US, May 2018. Reports are meant to build on each other and take readers through key issues in eCommerce. Each Report focuses on a key issue addressing one or more moments of truth in a shopper’s eCommerce journey.

What you need to know

Amazon is top of mind with online shoppers and other retailers and with good reason. Amazon’s popular Prime membership boasts over 100 million members worldwide and keeps those members coming back with perks like free shipping and streaming video in exchange for a monthly or annual fee. Meanwhile, Amazon keeps innovating, forcing online and offline retailers to re-examine their own offerings to figure out how to better compete with Amazon.

Prime membership is growing and given the fact that Prime members tend to be heavy online shoppers, retailers need to figure out how they can set themselves apart from Amazon in order to survive in an increasingly competitive marketplace. Prime presents both an obstacle for retailers to overcome and an opportunity for retailers to capitalize on. While Amazon is dominating online, Amazon does not have many brick-and-mortar store locations of its own, which retailers can and should be using to their advantage. Amazon’s innovations can also lend itself to imitation, which can in turn drive both new and repeat business for other retailers.

Expert analysis from a specialist in the field

Written by Matt Lindner, a leading analyst in the eCommerce sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Amazon is top of mind with online shoppers and other retailers and with good reason. Amazon’s popular Prime membership boasts over 100 million members worldwide and keeps those members coming back with perks like free shipping and streaming video in exchange for a monthly or annual fee. Meanwhile, Amazon keeps innovating, forcing online and offline retailers to re-examine their own offerings to figure out how to better compete with Amazon. Matt Lindner
Senior eCommerce Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The role of physical stores
          • Amazon sets table stakes for eCommerce Industry
            • The Impact of Prime
              • Amazon makes inroads in online grocery
                • Not everyone wants to shop on Amazon
                • Retailer Overview

                  • If Amazon builds it, other retailers will follow
                    • Prime time
                      • Joining forces
                        • Grocers are catering more to online shoppers
                          • Faster delivery
                          • Amazon Initiatives

                            • Prime’s perks and influence keep growing
                              • Figure 1: Amazon Prime membership, by online shopping frequency, March 2018
                              • Figure 2: Amazon Prime Now usage, by frequency of shopping on Amazon, April 2018
                              • Figure 3: Amazon offerings used, by frequency of shopping on Amazon, April 2018
                              • Figure 4: Attitudes toward Amazon Prime membership renewal, by age, March 2018
                              • Figure 5: Attitudes toward television among pay TV subscribers, by age and income, August 2017
                            • Prime Day is now a midsummer retail holiday
                              • Figure 6: Sample Amazon Prime Day 2017 marketing email, July 2017
                            • Whole Foods acquisition
                              • Figure 7: Amazon/Whole Foods promotional email, April 2018
                              • Figure 8: Frequency of online purchasing, by product category, February 2018
                            • Pickup locations
                                • Figure 9: Attitudes toward shopping on Amazon, by gender and age, April 2018
                              • Digital assistants put Amazon in consumers’ homes
                                • Figure 10: Methods of shopping on Amazon, April 2018
                                • Figure 11: Methods of shopping on Amazon – Alexa enabled device, by various demographics, April 2018
                              • Partnerships with Kohl’s and Best Buy
                              • How Retailers Are Responding to Amazon

                                • Paid membership programs
                                  • Figure 12: Bed Bath & Beyond BEYOND+ email sample
                                  • Figure 13: Walmart two-day free shipping email, January 2017
                                • Putting a spin on Prime Day
                                  • Figure 14: Sears Summer Splash marketing email, July 2017
                                  • Figure 15: Wayfair Way Day marketing email, April 2018
                                • Stepping up shipping speed
                                    • Figure 16: Purchase drivers – Same-day delivery, by product category, March 2018
                                  • Using stores to appeal to online shoppers
                                    • Figure 17: Walmart Pickup Discount email, June 2017
                                    • Figure 18: Factors that would influence an Amazon shopper to buy from another retailer, by Amazon shopping frequency, April 2018
                                  • Grocery retailers invest more in online
                                    • Figure 19: Frequency of purchasing food/drink products on Amazon, by Amazon shopping frequency, April 2018
                                  • If you can’t beat ‘em, partner with ‘em
                                    • Exclusive, hard-to-find, and private label brands
                                    • Amazon Shoppers – What You Need to Know

                                      • Parents are twice as likely as non-parents to shop on Amazon on a weekly basis
                                        • Millennials are more likely to shop at Amazon now that Amazon owns Whole Foods
                                          • Baby products, personal care products are popular with Amazon shoppers
                                          • Online Shopping Behavior

                                              • Amazon versus the field
                                                • Figure 20: Online retailers shopped, April 2018
                                              • Heavy Amazon shoppers are not limiting their online shopping to Amazon
                                                • Figure 21: Online shopping frequency, by Amazon frequency, April 2018
                                              • Parents are twice as likely as non-parents to shop on Amazon twice a week
                                                • Figure 22: Amazon.com shopping frequency, by parental status, April 2018
                                                • Figure 23: Attitudes toward shopping on Amazon, April 2018
                                                • Figure 24: Online retailer shopping frequency, by parental status, April 2018
                                              • Amazon has succeeded in reaching older online shoppers
                                                • Figure 25: Online retailers shopped, by age
                                              • Men are much more likely to shop on electronics sites than mass merchandisers
                                                • Figure 26: Online retailers shopped, by gender
                                              • Heavy Amazon shoppers are online grocery shoppers
                                                • Figure 27: Online retailers shopped, by Amazon.com shopping frequency, April 2018
                                            • How Consumers Perceive Amazon Versus Other Retailers – In Their Words

                                              • Online shoppers view retailers as being friends, and not just brands
                                                  • Figure 28: Online shopping frequency, by retailer and Amazon shopping frequency, April 2018
                                                • Amazon shoppers generally think of Amazon as being younger and hipper
                                                  • Walmart.com is viewed as being middle-aged, more working-class status
                                                    • Target.com is viewed as being a stylish woman
                                                    • What Consumers Are Buying on Amazon

                                                      • Baby products, personal care products are the most regularly bought items on Amazon
                                                          • Figure 29: Frequency of purchasing products on Amazon, April 2018
                                                        • How retailers can appeal to frequent Amazon shoppers
                                                            • Figure 30: Target Restock promotional email, May 2018
                                                          • Amazon looks to get more plugged in to shoppers
                                                              • Figure 31: Frequency of purchasing products on Amazon, April 2018
                                                            • Shoppers are turning to Amazon to build their closets
                                                                • Figure 32: Amazon Prime Wardrobe marketing email, May 2018
                                                              • Shoppers are buying furniture on Amazon
                                                                  • Figure 33: Frequency of purchasing furniture on Amazon, by gender, parental status, April 2018
                                                                  • Figure 34: IKEA TaskRabbit promotional email, May 2018
                                                              • How Consumers are Shopping on Amazon – In Their Words

                                                                • Amazon shoppers read reviews, expect more product information
                                                                  • Shopping for apparel on Amazon
                                                                    • General Amazon shopping trip
                                                                    • Attitudes toward Shopping on Amazon

                                                                      • Amazon shoppers like Amazon and tend to start their online shopping journey there
                                                                          • Figure 35: Attitudes toward shopping on Amazon, April 2018
                                                                          • Figure 36: Attitudes toward shopping on Amazon, by amazon shopping frequency, April 2018
                                                                        • Amazon’s impact on in-store shopping
                                                                          • Figure 37: Attitudes toward shopping on Amazon, by generation and parental status, April 2018
                                                                          • Figure 38: Attitudes toward shopping on Amazon, by parental status and age of children, April 2018
                                                                          • Figure 39: Attitudes toward shopping on Amazon, by generation and parental status, April 2018
                                                                          • Figure 40: Attitudes toward shopping on Amazon, by parental status and age of children, April 2018
                                                                        • The Whole Foods effect
                                                                          • Figure 41: Attitudes toward shopping on Amazon, by generation, April 2018
                                                                          • Figure 42: Attitudes toward shopping on Amazon, by parental status, geographic location, April 2018
                                                                        • Some consumers find it difficult to find products on Amazon
                                                                          • Figure 43: Attitudes toward shopping on Amazon, by age, April 2018
                                                                        • Amazon is too big for some Amazon shoppers
                                                                          • Figure 44: Attitudes toward shopping on Amazon, by gender, parental status, April 2018
                                                                        • Amazon shoppers want flexible delivery options
                                                                            • Figure 45: Attitudes toward shopping on Amazon, by gender, parental status, and area, April 2018
                                                                        • Why Consumers Buy on Amazon

                                                                          • Consumers shop Amazon for deals and fast delivery
                                                                              • Figure 46: Reasons for shopping on Amazon, April 2018
                                                                            • Reasons for shopping on Amazon vary by Amazon shopping frequency
                                                                                • Figure 47: Reasons for shopping on Amazon, by shopping frequency, April 2018
                                                                              • The trust factor
                                                                                  • Figure 48: Reasons for buying on Amazon, by household income, April 2018
                                                                                  • Figure 49: Amazon Prime participation, by household income, March 2018
                                                                                • Younger consumers want their products faster, while older consumers want to find a deal
                                                                                    • Figure 50: Reasons for shopping on Amazon, by generation, April 2018
                                                                                  • Younger women are making use of product reviews
                                                                                      • Figure 51: Reasons for shopping on Amazon, by gender, and gender and age, April 2018
                                                                                  • Issues with Amazon

                                                                                    • Prime is both a strength and a weakness for Amazon
                                                                                      • Figure 52: Frustrations when shopping on Amazon, April 2018
                                                                                      • Figure 53: Frustrations when shopping on Amazon, by Amazon shopping frequency, April 2018
                                                                                    • A little customer service can go a long way
                                                                                      • Stores still matter, especially to consumers who don’t shop on Amazon
                                                                                        • Figure 54: Reasons for not shopping on Amazon, April 2018
                                                                                    • Motivators to Buy from Another Retailer

                                                                                      • Hard to find products help retailers win business from Amazon
                                                                                          • Figure 55: Reasons for buying from another online retailer instead of Amazon, April 2018
                                                                                        • Light Amazon shoppers are more likely to be won over by free shipping
                                                                                          • Figure 56: Reasons for buying from another online retailer instead of Amazon, by Amazon shopping frequency, April 2018
                                                                                        • Amazon shoppers want products they can’t find elsewhere
                                                                                            • Figure 57: Reasons for buying from another online retailer instead of Amazon, by select demographics, April 2018
                                                                                            • Figure 58: Ulta POPSUGAR marketing email, March 2018
                                                                                          • Younger Amazon shoppers want same-day in-store pickup
                                                                                            • Figure 59: Reasons for buying from another online retailer instead of Amazon, by generation, April 2018
                                                                                            • Figure 60: Amazon Instant Pickup customer acquisition email, August 2017
                                                                                          • Going above and beyond to help the customer
                                                                                            • Figure 61: Reasons for buying from another online retailer instead of Amazon, by gender, parental status, April 2018
                                                                                        • Competing with Amazon in the Future

                                                                                          • Voice commerce is on the horizon
                                                                                            • Figure 62: Shopping on Amazon via a voice-activated device, by Amazon shopping frequency, April 2018
                                                                                            • Figure 63: Shopping on Amazon via a voice-activated device, by gender, by parental status by gender, April 2018
                                                                                          • Future interest in voice shopping is high among dads, Hispanic consumers
                                                                                            • Figure 64: Future online shopping behavior, by Amazon shopping frequency, April 2018
                                                                                            • Figure 65: Future interest in shopping via voice-activated device, by gender, parental status by gender, April 2018
                                                                                            • Figure 66: Shopping on Amazon via a voice-activated device, by Hispanic origin, April 2018
                                                                                            • Figure 67: Future interest in shopping via voice-activated device, by Hispanic origin, April 2018
                                                                                        • Appendix – Data Sources and Abbreviations

                                                                                          • Data sources
                                                                                            • Consumer survey data
                                                                                              • Consumer qualitative research
                                                                                                • Direct marketing creative
                                                                                                  • Abbreviations and terms
                                                                                                    • Abbreviations