American Marketer


Amazon continues to cement status as Goliath: study

November 25, 2013


Fifty-nine percent of adults in the United States have made a purchase on Amazon in the past year, according to a new survey by the Shullman Research center.

The "Shullman Luxury and Affluence Monthly Pulse" survey suggests that the consumer shift toward Amazon is powered by the engines of competitive pricing and convenience. Although Amazon's ascent, capabilities and penetration of the luxury market are nothing new, determining the size of jeopardized market share will help luxury brands find a common ground with the online retailer.

"When you look at the demographics of who these people are, they are younger people who are more into digital," said Bob Shullman, founder/CEO of the Shullman Research Center, New York. "The bottom line is, attitudinally, they are influencers and like luxury.

"A lot of people don’t realize that when they go to many ecommerce sites, that they're powered by Amazon," he said.

The Shullman Luxury and Affluence Monthly Pulse Fall 2013 Preview Wave was conducted online between Aug. 20-27 among U.S. adults age 18 or older.

A total of 1,322 completed interviews were obtained from five sample groups divided among four income brackets: $75,000 to $149,999, $150,000 to $249,999, $250,000 to $499,999 and $500,000 or more.

Join the crowd

The study found that 40 percent of respondents ages 18 to 34 buy at Amazon, versus only 25 percent of respondents above the age of 55.

In terms of gender, women are more likely than men to shop at Amazon. Fifty-six percent of female respondents report buying at Amazon, whereas 44 percent of male respondents report doing the same.

Amazon's Luxury Beauty store

Eighty-one percent of respondents reporting preferring to buy American products when shopping on Amazon. Fifty-six percent of respondents shopping at Amazon declared that they look for quality rather than price.

Furthermore, fifty-one percent of respondents shopping at Amazon like to buy designer or luxury goods.

Amazon's My Habit

A supplementary study examines the consumer propensities of respondents.

Forty-eight percent of women with a household income of more than $500,000 plan to take a luxury vacation in the next 12 months, while 41 percent of men with the same credentials plan to take a luxury vacation, according to the report.

The “Luxury and Affluence Monthly Pulse Fall 2013″ report teases out buying-pattern disparities among men and women in many areas such as premium cosmetics and designer clothing or accessories. The report also confirms previous findings that buying patterns across generations vary, notably in the categories of luxury vacation and premium beer and ales (see story).

What and where

Although Amazon is occasionally painted in ominous terms by luxury analysts, Jamie Nordstrom, president of Nordstrom Direct, expressed his admiration for the online marketplace at the L2 Forum 2013.

Amazon on Oct. 10 launched its luxury beauty store to expand its luxury offerings to aspirational consumers aiming to save money on high-end products while still obtaining a piece of the luxury lifestyle. The highly-anticipated launch may spur luxury brands to heavily promote their ecommerce platforms to retain sales and prevent products from slipping toward everyday commodity status.

With Amazon stepping into the luxury beauty sector, brands and high-end retailers should look to increase levels of consumer engagement and customer service via ecommerce so brand allure is not diluted (see story).

However, Mr. Shullman points out that the luxury beauty store marks the first time that Amazon attached luxury to a new service, which may portend similar stores to come.

"People in the luxury world need to be thinking about what to do if the luxury beauty store becomes the luxury watch store, luxury dress store, luxury shoe store," Mr. Shullman said.

"Amazon is well positioned if they really want to go full-bore into the luxury market," he said.

Final Take
Joe McCarthy, editorial assistant on Luxury Daily, New York