One need only to look at Amazon’s $25.4 billion in sales last quarter to say it is a titan of e-commerce. But a poll published this week by CNBC helps illuminate just how entrenched a part of our online shopping habits the retailer has become.
Consumers were asked how often they search for products or check prices on Amazon when they shop online. Some 24 percent of online shoppers said “always,” and another 25 percent said “most of the time.” That means Amazon has managed to lure some 49 percent of online shoppers to consistently consider their site. (And still another 26 percent said they “sometimes” search Amazon.)
This underscores the enormous challenge that traditional retailers face as they try to pull down more online sales. They have to win the minds of a shopper who is habitually — almost on autopilot, really — going to Amazon. And so while chains such as Walmart and Target are spending billions of dollars to create websites that are more attractive and easier to use, and are overhauling their supply chains to offer speedier and more reliable shipping, all those innovations simply won’t matter if they can’t get shoppers to reflexively think of them in the same way shoppers already think of Amazon.
Also noteworthy is how often shoppers said their Amazon searches lead to buying. In the poll, conducted Nov. 28 through Dec. 2, 24 percent of online shoppers said that they end up making a purchase “most of the time” they search on Amazon. Another 40 percent said they “sometimes” make a purchase during a visit to the site.
That would suggest that Amazon has, compared to the industry average, an extremely high “conversion rate,” a metric that measures how often a retailer is getting people to go from just browsing to buying. According to data from Monetate, the conversion rate was just 3 percent for the overall e-commerce category in the most recent quarter.
When experts talk about Amazon’s skyrocketing sales growth, they often chalk it up to two key factors: The retailer’s low prices and its innovations around speedy shipping.
And yet the poll found that neither of those were the most important factors shaping consumers’ decision to shop on Amazon.
The largest share of respondents, 89 percent, said the level of security the company provides for shoppers’ personal information was important. The next-largest share, 80 percent, cited its prices. The cost of shipping was considered important by 69 percent of shoppers, a finding which may reflect the extent to which other retailers have leveled the playing field in this area. Especially around the holidays, most major retailers are offering free shipping on at least some purchases.
Only 29 percent of those who shop on Amazon said its Prime program was important. The ranks of Prime members are believed to have swelled to greater than 40 million, and they are thought to be especially valuable customers because they are loyal ones. But this figure, when considered alongside the much larger share of shoppers who said free shipping was important when shopping on Amazon, serves as a reminder that there is still a large swath of shoppers that care more about cost than the convenience of near-instant-gratification shipping.
(Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)