Amazon: Mass, Affluent, Or Luxury Retailer?
In our November posting, we highlighted that Amazon was tied with Walmart for being the #1 store In America, with almost six in ten adults (59%) reporting they had made a purchase from it in the past 12 months. Notably, Amazon's reach was 68% among more upscale consumers — those with $75,000+ household incomes (the top 40% of Americans and the entry-level "affluents" to many affluent marketers), while attaining a 69% reach among those few adults with $250,000+ household incomes (the top 3% of American adults and entry-level "luxury buyers" to many luxury marketers).
A fair number of readers responded to this posting by stating they perceived Amazon to be a mass-market retailer and not really in the affluent or luxury markets. However, based on our most recent survey, we believe it is evident that Amazon targets more than the mass market and is also targeting the affluent market as well as the luxury market.
Looking at consumers who bought from Amazon in the past 12 months by their household incomes, it is clear that many of them appreciate prestigious, luxurious, and quality products and services, as is demonstrated by their responses to the following questions about their attitudes regarding shopping:
- 35% of all Amazon customers agreed to the statement "I like to buy designer or luxury brands," while 38% of the $250,000+ segment also agreed, as did 59% of the $500,000+ segment (the top 1% of adults);
- 45% of all Amazon buyers agreed with "I tend to buy based more on quality and less on price," while 63% of the $250,000+ segment also agreed and 72% of the $500,000+ segment agreed.
When these Amazon customers were asked if they had bought any luxury products or services in the past 12 months from any retailer, the following all stated that they had bought a luxury in the past year:
- 28% of all Amazon customers;
- 38% of the $75,000+ segment;
- 50% of the $250,000+ segment; and
- Almost three out of four (72%) of the $500,000+ segment.
When Amazon customers were asked which luxury products from a list of luxury categories they had
bought from any retailer, the #1 product bought was premium cosmetics, purchased by a third (34%) of all Amazon customers. Notably, premium cosmetics are the #1 luxury product bought by all Americans
in the past year, according to our survey, and that category is now the focus of a new store that Amazon launched on its website this past fall. Note the name that Amazon selected for this part of its
website — Luxury Beauty Store. It features Luxury Makeup, Luxury Nails, Luxury Skin Care, Luxury Fragrance, Luxury Hair Care, Luxury Tools & Accessories, and Luxury Men's Grooming.
Also high on the luxury category list bought by Amazon customers who responded to our survey are fine jewelry costing $500 or more, which 17% of all Amazon customers bought, rising to 35% of the $250,000+ segment and 48% of the elite $500,000+ segment. Another notable category is designer clothing or accessories, bought by about a quarter (23%) of all Amazon customers, about a third (32%) of the $250,000+ segment, and almost one half (49%) of the $500,000+ segment.
Which of the high-end categories may be the next to become the focus of an Amazon store? Only time will tell, and only Jeff Bezos and his colleagues know for sure. We suggest that you visit Amazon.com every now and then and type in the words "premium" and "luxury" and see what comes back. Perhaps your category is next on Amazon's list to be offered in one of its affluent or luxury stores. As this column clearly demonstrates, Amazon serves all market segments.