Why 17% of U.S. Households refuse to Buy from Amazon
As hard as it may be to believe, especially after the record setting Holiday Season Amazon just enjoyed, the Wall Street Journal’s research indicates that as many as 22 Million consumers refuse to buy from the monolithic marketplace. That works out to be about 17% of potential consumer based households available in the U.S today!
Literally, over 22 Million households did not buy a single item off of Amazon in 2016. When you consider the ramifications of such numbers… it makes Amazons record setting year that much more impressive. It also reflects a tremendous opportunity in that it means an untapped market share still exists for digital sellers who do business through the Amazon marketplace.
One only needs to answer the following question. How do we successfully access the untouched potential of 22 Million consumer households? First, we need to understand why these consumers have apparently chosen to not do business with Amazon in the first place.
7 Reasons Shoppers don’t buy from Amazon!
The WSJ recognized multiple reasons why these consumers chose not to make any purchases from Amazon in 2016. Some of them are apparently environmental and some of them are demographic. While not all of them can be easily overcome by Amazon Sellers…no doubt some of them can be. Below is the list that the Wall Street Journal compiled as to why such a large segment of consumers do not shop on Amazon:
- Their living situation makes it difficult to receive shipping packages
- They may have personal beliefs or desires to support other sellers
- The consumer may have more convenient access to local goods
- It is possible they have limited internet access
- They may have a fear of mistrust of using the Web to place orders
- Some people simply like to browse products personally in stores
- They may find products at lower prices than those on Amazon
The WSJ research also uncovered a few other interesting facts that may preclude consumers from shopping on the Amazon site. Some people have a tendency to “overspend,” once they have access to Amazon’s easy purchasing process. For this reason, some people purposely avoid Amazon.
Another reason some individuals refuse to buy on Amazon is the wide selection of products available to them. While this may seem somewhat confusing to many sellers, it has to do with the “Psychology of Choice.” In its simplest terms, it means the more choices a customer has to consider, the more overwhelmed by those choices they can become. This can lead a consumer to feel uncomfortable with their decision making process…ultimately resulting in them refusing to make a choice at all.
Other factors can also contribute to these households refusing to purchase from Amazon as well. It has been noted that some individuals who are not active shoppers on Amazon tend to have lower incomes compared to the average on-line digital shopper.
Brad Tuttle of Time Magazine also suggests that customers have been complaining about Amazon’s escalating prices for months now. He goes on to state that, “….the company (Amazon) doesn’t seem to be holding to its original vision of undercutting competition with low price tags. For people who have to look for great deals to make ends meet, those (price) hikes potentially could push Amazon purchasing out of reach.”
How can an Amazon Seller capitalize on these Challenges?
No doubt, many of the disqualifying reasons this large segment of potential consumers will not shop with Amazon, cannot be overcome by the most aggressive and forward-thinking digital sellers in the marketplace. However, there are a few things that such sellers can do that may actually help to capture some of that market segment.
As an example, offering alternative shipping address opportunities for your customers may make them more comfortable with placing orders to begin with. Perhaps the seller could suggest that the customer’s orders could be shipped to their place of work during normal business hours? This may provide the customer a more secure receiving address for their order.
By providing more customer testimonials for outstanding service and product quality, this may help dissuade any fear or mistrust of ordering over the Web for many first time customers. If the seller provides first time shoppers additional discounts to simply try the Amazon or Web shopping experience initially, this may also encourage such consumers to make a digital purchase.
Another concept that many sellers are experimenting with is providing some type of donation to specific organizations based on product sales. As an example, if the seller advertises that they will make a donation to the ASPCA for every pet toy or item purchased, then consumers will feel like they too are supporting such organizations with a percentage of their purchases on-line. This type of sales/reward concept may help offset the challenge of potential consumers choosing retailers who support their personal beliefs.
Forward thinking = Bottom Line
Among other ideas that sellers are attempting to entice the uninitiated to the digital marketplace are concepts like “reward points.” These points compound at a cumulative total based on additional or ongoing purchases. These reward points can be applied to future purchases or for bonus products offered at various times of the year.
The bottom line is that as successful as Amazon is, it has not reached every household in the U.S. In fact, it appears that a vast untapped potential of new digital customers are still available. These new consumers are still willing to consider Web based retail purchases. It is simply up to forward-thinking sellers to figure out how to best capture their attention and interests. When you consider that for most of these customers you may be the first digital seller to actually target them, it may make bottom-line sense… that such opportunity is worth the effort!