Find out how to establish a presence in the world’s largest economy in Retail Week’s new whitepaper, revealing what US consumers want and how UK retailers can get in on the online marketplace action.
In 2016 the web represented almost 42% of the growth in the US retail market – most of it driven by Amazon.
There is little reason to believe this trend will reverse. FTI forecasts that online retail sales in the country will reach $440bn (£343bn) this year and $562bn (£438bn) by 2020.
Understanding online marketplaces in the US
Retail Week’s latest white paper, produced in association with ChannelAdvisor, reveals why marketplaces – from the behemoths like Amazon and Walmart to newer kids on the block such as Tophatter and Bluefly – can be a logical first step for retailers looking to make a splash across the Pond. Download it for free here.
Amazon is far and away the commanding force: a whopping 43% of all online retail sales in 2016 went through the retailer, according to Slice Intelligence. Using data from four-million online purchases, the analysts also concluded that Amazon accounted for 53% of the growth in US ecommerce sales last year.
An Internet Retailer survey of 500 US consumers in December found that more than half (52%) go directly to the online retailing giant when shopping online. “Simply put, Amazon’s already dominant share of the US ecommerce market is only increasing,” noted Business Insider recently.
US customer expectations are therefore “driven by Amazon”, says ChannelAdvisor director for strategic partnerships EMEA, Håkan Thyr. “Shoppers are geared towards instant gratification,” he adds.
Indeed, a study last September by Consumer Intelligence Research Partners found that 20% of all US consumers are Amazon Prime members, for example. The combination of high customer loyalty and brand awareness has fuelled the company’s growth.
“Shoppers still predominantly shop in online marketplaces, less out of an urge to discover new brands and more for the security of shopping with a familiar, trusted entity,” says Connor. “We feel more confident buying from names we recognise.”
New kids on the block
But Amazon isn’t the only major online marketplace retailers could harness in the US.
Walmart recently splashed $3.3bn (£2.6bn) on ecommerce start-up Jet. The deal will help keep prices low (on Jet, prices fall as customers add more items to their basket) as well as strengthen Walmart’s ecommerce infrastructure.
It’s the latest in a five-year acquisition spree, but Thyr predicts there is more business to be done as Walmart looks to “keep up” with the market leader.
So, is there any need for UK retailers to look beyond the three in marketplace retailing? As always, it depends. Niche marketplaces are emerging and, in some cases, growing very quickly.
Those in rude health all have one thing in common, Thyr says: “They aren’t trying to be Amazon.”
Bluefly, for example, won’t appeal to every consumer, but for those after medium- to high-end fashion it’s extremely popular, especially since the transition to a marketplace model. This has essentially expanded Bluefly’s inventory. “Our goal has been to leverage Bluefly’s traffic and experience while introducing more brands to our customers and more of our customers to our brands,” said former chief executive Neel Grover in November.
“We have upgraded every aspect of purchasing, delivery, fulfilment and customer service.”
How do the US’ marketplaces compare?
Find out more
Did you know that 42% of Americans now use mobile more often than desktop to buy online? Or that 59% now expect a personalised customer experience?
Such knowledge is key for retailers eager to dip their toes in US waters quickly, safely and profitably. Find out more in our new white paper by clicking here.