How do consumers feel about the Amazon retail takeover?
In 1820 Charles Caleb Colton wrote, “Man is an embodied paradox, a bundle of contradictions.”This is particularly true of today’s consumers. They say one thing, then do another. They profess to have deeply held beliefs, but rarely act on these beliefs…and their Shopping behaviour is no exception.
Stripe Partners recently conducted research into how ‘subscription shopping’ and Amazon are changing retail, and our time spent with real consumers revealed two key things:
1// Amazon is becoming an ever-more central part of how we shop, and how we think about shopping, access and convenience
2// Consumers feel the paradoxical tension of letting Amazon become their main source of goods at the cost of traditional retail
The Amazon Effect? Retail Disruption
Amazon currently accounts for 16% off the UK retail market and in the US, it is responsible for 43% of all online sales. Amazon Prime acts as an accelerant on the fires raging in retail. With a high penetration rate of 1/3 of all UK households, Amazon Prime’s 8 million members account for 40% of its annual UK sales.
Amazon is fast becoming the search destination of choice, outpacing Google at a rapid clip. In the US, 55% of all product searches start in Amazon, not Google. Ask those who regularly use Amazon and the words ‘ease’ and ‘convenience’ drop out. But with the ease comes some unease – as Peter, a serial Amazon shopper, explains:
“They’ve kind of turned into a bit of a shopping monster – Google’s the first word you think of when you think of the internet. Amazon is the first thing on everyone mind when think about shopping.”
Consumer Nadia, like Peter, is a self-confessed Amazon addict: “The suggested deal thing on Amazon really gets to me, I always end up buying things I didn’t plan to buy.”
Conflicted Feelings and Amazon Prime
Both Peter and Nadia admitted to a sense of guilt on two fronts. The first is a form of ‘addiction’. They spend more money than they think they should, and buy things that they don’t always need. The second? A large chunk of their discretionary spending is being channelled through Amazon. Other retailers, both independents and local, don’t get much of a look-in.
People we spent time with revealed a sense of discomfort with their shopping behaviour. They wondered: ‘Is my relationship with Amazon healthy?’ There is a palpable feeling that Amazon’s takeover is both personal and societal.
While consumers are keenly aware of the long reach Amazon has on their lives, many were clear that would not want to buy ‘everything’ from the retail behemoth.
When compared with online specialist retailers like BeerBods, Amazon was described as a cold warehouse with goods piled up high. Specialist and distinctive products would not be trusted if found on Amazon.
Amazon’s days as a dedicated bookseller have long since passed, and in world of specialist and artisanal products, Amazon can feel generic. Hayley’s relationship with Amazon tracks this shift: “I used to go on Amazon to buy books, a real treat for me, but it’s moved away from being a treat website to being more of a core spend shop”.
Amazon’s Opportunity for Both Utility and Experiences
In our discussions one other element of the Amazon Takeover loomed: Amazon is becoming increasingly efficient at recommending and delivering products. Our study revealed that as a hyper-efficient shopping channel it a great place to ‘do’ shopping. But it struggles to deliver against the pleasures that come with ‘going’ shopping.
Amazon can feel more like a utility than a retailer or curator to some. Michelle mentioned “I use Amazon to get boring things. In the Jo Malone they tickle your senses, the smell hits you, the customer assistant says ‘hi’, and it’s a really pleasurable experience”.
There’s clearly room for both utility and experience in retail, and people need places for the basics AND for something special.
But as the digital subscription market evolves there’s reason to believe there’s space for niche brands. Smaller players can compete against incumbent brands in established categories. Think designer Cornerstone razors instead of everyday Gillette. As they do so, these specialist brands may also offer a fresh opportunity to help consumers reset their relationship with Amazon.