I read a staggering statistic over the weekend: in the U.S. it is estimated that out of every $1 spent online shopping, 43 cents is spent on Amazon.
No wonder CEO Jeff Bezos’s wealth has skyrocketed to over a cool $100 billion.
This got me thinking about my own spending habits, through the eyes of a consumer rather than a markets participant analyzing monthly retail sales and wage data. It dawned on me that with my own online shopping, it is true that almost half of everything I have bought online has been on Amazon — be it last minute gifts, household appliances, pantry staples, Amazon Kindle and piano books, and gadgets I clearly don’t need.
I have been known to buy “topper uppers” to get to the £20 minimum Amazon requires for local delivery (the low being a heart-shaped egg mold because everyone needs one of those. I panicked).
We read so much about the death of street shopping but we are invariably all playing a part having become time-deprived bargain hunters. Online shopping is often cheaper and most definitely faster than bricks-and-mortar. Many e-commerce stores now offer free delivery and returns as sweeteners.
Even if you do have to return an item, the inconvenience of posting it back at the post office against going back to an actual store is minimal. It is no wonder that retail employment at British shops fell by 62,000 last year due to “digital disruption,” according to the U.K’s Office for National Statistics.
As consumers, we are also instilled with a deflationary mindset. There always seem to be sales going on: Why buy today when it will be cheaper in a few weeks? You can hunt for the cheapest deal with a few clicks on your computer, and it’s much more efficient shopping from the ease of your sofa than venturing out into the frenzied world of holiday shopping.
To illustrate consumers’ growing preference for online, let me share another statistic: Online retailer ASOS has now surpassed British iconic brand Marks & Spencer in market capitalization. Last week ASOS shares grew to a total market value £4.89 billion. Now here’s the kicker: ASOS’s annual revenue is about a fifth of M&S’s. A similar phenomenon is occurring with food stores.
Perhaps the best manifestation of consumer and retailer trends occurs during the current holiday period as the U.K. seems to have fully embraced the American shopping extravaganza of Black Friday and Cyber Monday.
The shopping day has become a huge event in the U.K. and this year is shaping up to be no exception: Barclaycard, which processes nearly half of all debit and credit card transactions in the U.K., estimated that this Black Friday spending ended the day up 8 percent versus 2016 (as of 5.p.m. Friday).
Breaking with my online shopping habit, I went to a mall with my sister-in-law this last weekend. We spent three hours wandering around, walking in and out of shops, getting spritzed with perfume and creams, sipping coffee and stopping for lunch. We may have bought a thing or two but the highlight was having a fun day out. The shopping was secondary (and highly inefficient).