A new study from IPG Mediabrands’ digital unit Reprise says the “Amazon Effect” is accelerating online shopping in Canada, contributing to growth of 87% for e-commerce and 139% for mobile commerce.
The 83-page report, Rethink eCommerce, is an examination of the online consumer journey based on interviews with 1,500 Canadians aged 18+. The report was shared at an industry breakfast event earlier this week by the Reprise team of (top photo, from left) Matt Ramella, managing director; Nicole Simpson, VP, client business partner, Matt Sallis, managing director, accounts and performance, and Kevin Bishop, VP performance.
The report examines so-called “points of friction” for online shoppers (ie: shipping fees, an inability to touch/see a product before buying, and shipping time) and the advantages of e-commerce (including the ability to “shop around,” time savings, wider selection and customer reviews). While millennials are most concerned about getting products cheaply and fast, older Canadians worry about online shopping contributing to a loss of the “human element.”
Advertising is the most effective method for influencing consumer purchase decisions that are more aspirational and less functional in nature, such as patio and garden items, clothing and health and beauty products.
The report also delves into Amazon’s impact on consumer shopping behaviour (spoiler alert: It’s significant).
Three-quarters of respondents said they shopped on Amazon in the past six months, with 85% indicating that they planned to do so in the future. No other major retailer was close, with 31% of respondents indicating that they had shopped online at Walmart in the past six months (with 50% indicating they planned to do so), and 29% saying they had shopped at Costco (52% said they planned to in the future).
More than 40% of Canadian households now have an Amazon Prime subscription, which offers free two-day shipping, with more than half (51%) of respondents saying they purchased their membership in the past year.
Amazon is dominant in several online shopping categories including toys and games, appliances and baby products, and competitive with traditional leaders like Walmart and The Home Depot in categories including grocery, patio and garden, health and beauty, books and clothing. It is currently trailing in furniture, electronics and automotive.
Eight days is the average amount of time between consumer research and purchase, although there is a wide variance by price point. The average amount of time between research and shopping for grocery and cleaning supplies, for example, is 2.3 days, compared to 12.3 days for furniture and decor.
Online shopping marketplaces such as Amazon are the preferred choice for discovering new products, cited by 37% of shoppers as the most useful, tied with recommendations from family/friends and ahead of discovering a product in-store (31%).
Just over a quarter of respondents (27%) cited flyers/inserts as a useful source of discovery, while online ads were cited by 22% of respondents and both print ads and TV were cited by 18% of respondents.
Amazon has become a one-stop destination for branding, reviews and purchase, with other platforms also working to link discovery directly to purchase. “The online funnel will collapse as awareness becomes one click away from purchase across all major platforms,” the study concludes.