Are the youth getting restless when it comes to Amazon?
By Hugh Fletcher, Global Head of Innovation and Consultancy at Wunderman Thompson Commerce
Amazon’s dominance of the digital commerce industry is no longer news. It has long since become an established fact that the rest of the industry has to accept and work with. Take Prime Day this week – a two-day discounting event that has become an event in its own right. Who else can say that?
However, that does not stop us being on the constant lookout for chinks in the company’s armour, for indications of where its power is not quite so irresistible and where opportunities for other players still exist. For instance, how important is your age in how you view the marketplace behemoth?
According to our latest Future Shopper consumer survey, another age group can potentially be added to the group of Amazon non-comformists. While it has long been depicted as a young person’s channel, 20 years on, it is no newcomer in the commercial world anymore. As a platform and as a global enterprise, Amazon has very much reached maturity, and many of its most loyal customers have grown with it.
But what of those ‘digital natives’, the 16 to 24-year-old members of Generation Z who have been born and raised in an Amazon world? This group might, just might, be drifting away – or at least open to moving away – from the once “usurper turned king”.
The Future Shopper 2019 results showed that 36% of respondents said most of their online spend went to Amazon. The highest figures were for the 25 to 34-year-old Millennial group and for 35 to 44-year olds, both 38%. The lowest were for the over 55s (33%) and for 16 to 24-year-old ‘Gen Z’ (34%).
This is admittedly too small a variation to read too much into – Gen Z are still spending more of their money through Amazon than any other channel – but, based on their digital nativity, you might expect them to be way ahead of the pack.
What is also interesting is that this age group was the second least likely to spend on other marketplaces such as eBay (20%) and the least likely to spend through retailer sites (17%). Yet, where they do lead is in going to straight to source, i.e. branded sites (20%), when spending online.
Similar results were repeated when we asked how shoppers searched for products online. Again, Gen Z were the second least inclined to use Amazon after the over 55s (51% and 50% respectively). This compares to an average of 56%, with highs of 59% and 60% for Millennials and 35 to 44-year olds.
On their own, these insights into the online behaviours of Gen Z shoppers would not be enough to conclude that Amazon could be losing its lustre for the youngest shoppers. But what gives them more weight is the fact that, when quizzed on their opinions of online channels and services, the youngest respondents were clearly less impressed with the e-commerce giant than other age groups.
For example, they were asked to rank different online shopping channels on their performance in 12 different areas. In every case, the number of Gen Z ranking Amazon as the best option was below the survey average. The figures were the lowest of all five age groups in 10 out of 12 categories (including access to the brands they wanted, easy returns process and strong customer service); on the other two, they were second lowest.
Digging into the possible reasons why younger shoppers are less impressed with the Amazon offer than other age groups, there are some intriguing insights. One of the biggest is social media: 49% of Gen Z said they actively recommend products online to friends and contacts, through the likes of tagging and sending links in direct messages. This compares to 38% of all shoppers surveyed. Gen Z was also the leading age group in selecting an alternative retailer to Amazon based on brand ethics.
What we might call the social aspects of shopping online – peer recommendations, the role of influencers, interacting directly with favourite brands – may well be an important reason younger shoppers are looking beyond Amazon for fresh experiences.
Clearly Amazon is still a huge factor in the online shopping habits of under 25s. But when we look at the bigger picture – the higher preference for finding inspiration, searching and spending on brand websites, the role of social media, the lower ratings for its services, the attitude towards stores and the tendency to put brand reputation and engagement higher than factors like price when considering what would tempt them not to use Amazon – we can conclude that Gen Z are open to alternatives to its domination.
The fact that brand experiences are right at the forefront of their tastes should be right at the forefront of everyone’s minds when considering ways to grab market share back from the king of e-commerce.