Adult Affluents Are Significant Amazon Shoppers

According to The Shullman Luxury and Affluence Monthly Pulse reports on the expectations, behaviors, and plans of adults among affluent consumers, the drivers of the luxury markets, Americans with lots of money are now shopping at Amazon. For example, 69% of the adults in the $250,000+ household income segment have shopped there in the past 12 months, says the report.

Luxury and affluent marketers define their target markets in many different ways. This study provides selected insights regarding American consumers (18+ in age) in total and according to their household incomes:

  • Adults living in households with total incomes of, $75,000 or more (41% of all adults and the level where some marketers believe affluence begins)
  • $250,000 or more (3% of all adults and the level where many marketers believe luxury begins),
  • $500,000 or more (the top 1% and where luxury consumers definitely exist).

Marketers and retailers need to start thinking about how they are going to compete with Amazon as it continues to penetrate these marketplaces, says the report, offering upscale consumers more shopping-related benefits such as Sunday deliveries.

  • 60% of Amazon's customers shop at Amazon at least once a month and, as household income increases, so does the probability of an Amazon customer's shopping there (64% of the $500,000+ household-income segment shops there once a month or more frequently).
  • 29% of Amazon's customers report that they are enrolled in the Amazon Prime service. Notably, the Prime enrollment soars to 45% at the $500,000+ income level.
  • Attitudinally, 35% of Amazon's customers and 59% of its $500,000+ household-income customers agree with the statement that they "…like to buy designer or luxury brands."
  • Not only are a substantial portion of Amazon's customers attitudinally predisposed to buying designer or luxury brands, about a quarter (28%) of them report they purchased a luxury from one or more retailers in the past 12 months, with this luxury purchasing level rising to 50% among the $250,000+ income segment and 72% among the $500,000 income segment, says the report.

Amazon and Walmart are the only two retailers from which the majority of Americans (59%) made a purchase in the past twelve months. Notably, Walmart reached more mass-market adults (with household incomes of less than $75,000) while Amazon reached many more affluent and luxury-oriented consumers (household incomes $75,000+, $250,000+ and $500,000+). According to this survey, Walmart customers' average income is about $76,000 while Amazon's average is about $89,000.

Based on Amazon's having an upscale customer base on average, the remainder of the study focuses on Amazon and its current marketplace positioning among upscale consumers who tend to shop often in the luxury and affluent marketplaces.

Adults (% of Segment)

In past 12 months:

All Adults

Household Income

< $75,000

$75,000+

$250,000+

$500,000+

Bought from Amazon

59%

53%

68%

69%

63%

Bought from Walmart

59

60

57

42

36

Source: Shullman Research Center, December 2013

Depending on which upscale marketplace(s) retailers in the top 20 list may actually target, they and Amazon share many of the same customers today. Notable among those with material overlap with Amazon are Walmart, Target, Best Buy, The Home Depot, Lowes, Macy's, e-Bay, JCPenney, Sears, Costco, Barnes & Noble, Apple, and Nordstrom, all of which share at least 30% of Amazon's customer base among one or more upscale segments.

Compared with Amazon customers with lower household incomes, those in the $500,000+ market segment are more likely to shop at Amazon once a month or more frequently (64%). Notably, though, 60% of all Amazon customers report they shop there at least 12 times a year.

Amazon Shoppers

 

 

All Adults

Bought from Amazon in Past 12 Months (% of Group)

Total

HHI $75,000+

HHI $250,000+

HHI $500,000+

 

Bought from Amazon in past 12 months

59

100%

100%

100%

100%

 

Total once a month or more often

36

60

57

57

64

 

Once a week or more often

9

15

8

7

17

 

Once every two or three weeks

12

20

25

27

32

 

Once a month

15

25

24

23

15

 

Once every two or three months

13

22

25

22

14

 

Once every four to six months

7

11

13

12

17

 

Less often than once every six months

4

6

6

10

5

 

Source: Shullman Research Center, December 2013

 

When probed about their attitudes regarding shopping, Amazon customers:

  • Are predisposed to buying American, but this orientation drops as household income rises
  • Focus more on quality than price as incomes increase
  • Seek out superior service as incomes increase
  • Like to buy designer or luxury brands, especially at the $500,000+ income level
  • Are not particularly influenced by celebrity endorsements

Amazon Customers (Percent of Segment)

 

All Adults

Bought from Amazon in Past 12 Months:

Total

HHI $75,000+

HHI $250,000+

HHI $500,000+

Agree strongly or agree:

 

 

 

 

 

I like to buy American products and services

69%

71%

69%

54%

49%

I tend to buy based more on quality and less on price

44

45

58

63

72

I love to shop

43

46

43

44

47

I seek out superior service when shopping

43

43

53

54

64

I like to buy designer or luxury brands

33

35

36

38

59

I usually buy the brands my parents bought

28

27

23

11

13

When shopping, I look for products and services that are exclusive

28

24

26

23

31

I sometimes buy products endorsed by celebrities

20

16

21

17

8

Source: Shullman Research Center, December 2013

When asked if they bought any luxury products or services in the past 12 months from any retailer, about one out of four Amazon customers in total did so, but as household income rises so does the percentage of Amazon customers who bought a luxury product or service in the past 12 months. Notably, half of the $250,000+ household-income segment did so, while almost three out of four (72%) of the $500,000 segment also bought one or more luxuries.

The number one luxury category that these consumers bought was premium cosmetics. As income rises, so does the likelihood of Amazon customers' buying many of the luxury categories listed. Notably, in Fall 2013 Amazon launched "Luxury Beauty" as a separate "store" on its site.

Bought from Amazon in Past 12 Months (Based on luxury purchasers)

  • Premium cosmetics
  • A piece of fine jewelry
  • Designer clothing or accessories
  • Premium fragrances
  • Fine/premium wines
  • Luxury car, SUV, or truck
  • Luxury vacation
  • Fine/premium liquors
  • Fine/premium beers or ales
  • Fine/premium champagnes/ sparkling wines
  • A fine watch
  • Fine/premium liqueurs
  • Luxury cruise
  • Fine art or antiques

Source: Shullman Research Center, December 2013

For additional information from the Shullman Research Center, please visit here.

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