In the shadow of Amazon’s growing dominance, online retailers across multiple industries are on the defence in a shrinking retail space. And as they strive to give consumers compelling reasons to shop from them directly, identifying and understanding the needs and behaviours of the millennial demographic will be critical to their survival.
Amazon is the default ecommerce destination for this demographic, with 59% of 16-36 year-olds heading to Amazon before any other ecommerce website, according to our research. And so Amazon’s main propositions – convenience, value, and product inventory – clearly speak to millennials.
Amazon Prime, offering fast, ‘free’ shipping and one-click purchasing, forms the backbone of Amazon’s cost proposition and has attracted more than 100 million members globally who spend nearly 50% more on the platform than non-members.
The retail giant’s easy returns process and vast inventory have also contributed to its market dominance. From the outset Amazon positioned itself as the ‘Everything Store’ and 23% of millennials say the main reason they’d shop with Amazon rather than another site is because of its range of products and categories.
This breadth of offering, which continues to widen, is hugely daunting for retailers, and Amazon has been ruthless in using data from its customers, sellers, and competitor brands to test consumer appetite for particular products and price points. It’s used this insight to roll-out more than 70 private-label brands, earning itself a reputation for ‘using the sales data of its own sellers to drive them out of business’.
Amazon is good at being an ecommerce company, but even better at ‘making new ecommerce companies that sell new things’, using its scale and data to move overnight and disrupt a growing number of industries. In the words of customer experience expert Shep Hyken, Amazon has become ‘the master of being anticipatory’, using data from millions of Amazon shoppers (purchasing from a product inventory of millions) to spot trends and ‘make predictions with uncanny success’.
But the retail Goliath is a black box when it comes to sharing data with retailers, and so customer insight – Amazon’s greatest asset – is the very thing retailers must be prepared to sacrifice when selling on the platform.
In this report, based on a nationally-representative sample of 1,000 UK millennials, we aim to help retailers understand how they can adapt ecommerce experiences to better meet the needs of millennial shoppers, and to survive and thrive in the Amazon era.
Amazon is the number-one retail destination for millennials. 1 in 5 millennials ‘always’ head to Amazon first when looking to make an online purchase; 59% ‘always’ or ‘often’ start their online shopping journeys on Amazon.
Price is king for UK millennials. Price is the number-one consideration for millennials when it comes to online retail. The leading reason millennials choose Amazon over other ecommerce sites is the perception that its products are often cheaper. Price is also the primary reason why millennials would shop with any ecommerce website again. A massive 87% of price-savvy millennials are very likely (41%) or likely (46%) to look at several different websites or apps to see where they can get the best price for a product.
16-36-year-olds shop with intent. Asked what best defines a positive ecommerce experience, millennials say it’s when they know what they want and can find it ‘quickly and easily’. But ecommerce websites are making this difficult by failing at the basics, from site performance to product information. The most common problem millennials encounter when shopping online is a ‘lack of product information and / or reviews’ followed by the site being ‘too slow or containing errors’.
Amazon is transactional, not inspirational. Almost 1 in 10 millennials say the reason they would choose to not shop with Amazon in some instances is because they don’t always know what they’re looking for and it’s hard to find inspiration on Amazon. Amazon is the default shopping destination for millennials shopping with strong intent to buy, but providing experiences that allow consumers to enjoy the discovery of products, not just the fulfillment of what they know they want, is the greatest opportunity for retailers battling Amazon for millennial customers.
Reviews are integral to the ecommerce journey. A massive 93% of millennials are very likely (56%) or likely (37%) to read product reviews before making an online purchase. Offline research is dead, with just 1% of millennials saying they research offline before making purchases. Mobile is king for research, and desktop / laptop is king for purchases.
The remainder of this report explores the findings in full, offering analysis and commentary from Inviqa business consultants on how online retailers can exploit Amazon’s weaknesses and better cater to the needs and behaviours of millennial shoppers.