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Adult Affluents Are Significant Amazon Shoppers
by Jack Loechner, Wednesday, January 1, 2014 6:15 AM
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
AdultsHousehold 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. .