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Why 76% of Americans Shop on Amazon

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Updated

Walmart to claim 8.0% of American holiday shoppers

Amazon (AMZN) has attracted more than 75% of Americans shopping online this holiday season, dwarfing rival retailers such as Walmart (WMT) and Best Buy (BBY).

According to CNBC’s 12th annual All-America Economic Survey, 76% of American consumers expected to do most of their shopping on Amazon this holiday season. In comparison, the survey that found just 8.0% of Americans planned to do their holiday shopping at Walmart—the big-box retailer whose US (SPY) e-commerce sales jumped 50.0% in fiscal 3Q18 (October 2017 quarter).

Free shipping a major attraction

Heavy investment in its delivery system appears to give Amazon the distinction it seeks to be successful in the crowded e-commerce industry. The survey found that free shipping was an important factor in consumers’ decisions on where to shop online.

According to the survey, 43% of these respondents mentioned free shipping as the most important factor when it comes to purchasing online. Amazon ships orders free of charge for subscribers to its Prime program, which costs $99 per year.

Amazon had 90.0 million Prime subscribers in the US at the end of 3Q17 compared with 85.0 million at the end of 2Q17, as illustrated in the chart above and according to estimates by Consumer Intelligence Research Partners (or CIRP).

Walmart, Target (TGT), and eBay (EBAY) also have free shipping services as part of attracting buyers to their platforms.

Amazon leads in conversion rates

Not only does Amazon lead in the number of consumers planning to shop on its site this holiday season, but the company also has a significantly higher conversion rate—a measure of browsing consumers who end up purchasing an item.

CNBC’s survey found that 57.0% of consumers who browse on Amazon purchase an item on the site. The average online conversion rate is just 3.0%.

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