New Study From Wunderman Thompson Commerce Reveals Amazon Lacks Loyalty Among Gen Z

Wunderman Thompson, Amazon, Gen Z

Over a third of consumer spending goes to Amazon, but young shoppers are not sold on the benefits of the retail giant

A new study released by Wunderman Thompson Commerce found Amazon’s race to dominate eCommerce could be facing challenges, as younger consumers report less satisfaction with the retail giant than older generations.

The company’s latest Future Shopper report takes an in-depth look at the current commerce landscape through the lens of the modern shopping journey and found that while Amazon attracts more than a third of all online retail spend internationally (36%), 16 to 24-year olds are less likely than older shoppers to believe the marketplace provides the best experience when it comes to access to brands, easy returns, and customer service. Almost one in five (18%) Gen Z consumers also said they were swayed by brand ethics when making a purchase decision, a factor which would see them choose another retailer over Amazon.

For brands and retailers, the study revealed a key challenge in the online shopping journey. While consumers are relatively platform-agnostic when it comes to finding inspiration for purchases, this behavior changes when they search for products. Over half (51%) of consumers said they turn to Google and other search engines for inspiration or ideas for products to buy, while 33% said the same for brand websites and 32% for social media. However, when it comes to actively search for individual products to buy online, 56% of consumers go directly to Amazon to start their search.

Although the statistics reflect Amazon’s increasing dominance, there were certain factors that shoppers said would influence their decision to shop elsewhere. For consumers to choose other retailers and brands over Amazon, they look for the following key attributes:

  • Cheaper pricing (61%)
  • More attractive loyalty programs (26%)
  • More convenient delivery options (23%)
  • A better, more specialized product range (18%)

Consumers are also still craving an in-store experience; almost half (46%) say they prefer to shop with a brand that has a physical store, which rises to 49% among Gen Z shoppers.

Neil Stewart, Global CEO, Wunderman Thompson Commerce said: “Brands and retailers continue to grapple with the challenge of how to exist alongside Amazon. While the retail giant may be a competitor, it is also a platform that can give brands and retailers enormous scope to reach millions of consumers globally. The most important thing is that they find a way to partner with Amazon but still own the relationship with the customer; now and into the future.”

The Future Shopper report also found that, when purchasing products, there is only a handful of product categories in which Amazon is not the number one purchase destination. These include:

  • When buying clothing and fashion, 26% of consumers shop on retailer sites like Selfridges, compared to 17% on Amazon
  • When buying health and beauty products, 24% of shoppers prefer to go to retailer sites, compared to 21% who shop on Amazon
  • For luxury items such as high-end clothing, watches, and jewelry, 21% prefer to buy from the website of the brand directly
  • In other categories including entertainment, technology, and home and garden products, Amazon is the preferred way to buy items

Stewart continued: “Amazon Prime is the world’s most advanced loyalty program and has completely changed what ‘good’ looks like for consumers. Expectations are set incredibly high by the speed, ease, and convenience of the Prime service but, rather than relying solely on replicating this model, brands and retailers need to find the areas where Amazon falls down in the eyes of consumers. Focus on “What Amazon Cannot Do” (WACD) and this is where your company can compete. The future of retail is up for grabs for the companies that can tap into what customers will want from their shopping experience in five, 10 and 15 years’ time.”

Must read: How Gen Z Influence the Business and Marketing Channels

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