Surveyed shoppers made 51% of their purchases on the web
For the first time, consumers say they bought more of their purchases on the web than in stores, according to an annual survey of more than 5,000 online shoppers by United Parcel Service Inc.
The shoppers now made 51% of their purchases on the web compared with 48% in 2015 and 47% in 2014, according to the survey by UPS and analytics firm comScore Inc. The survey polled shoppers who make at least two online purchases in a three-month period, excluding groceries.
The latest results of the survey—now in its fifth year—illustrate the degree to which the adoption of online shopping is accelerating. This year, 44% of smartphone users said they made a purchase from their device, up from 41% a year ago. It also helps explain why retailers are having so much trouble adjusting to the new cyber shopping era.
The shoppers reported that only 20% of their purchases were made in a store the conventional way—going to a store, browsing there and buying—down from 22% a year ago. Forty-two percent chose to search and buy entirely online, while the rest said their purchases were made by combining online and in-store shopping and browsing.
“There’s been a dramatic shift,” says Steve Osburn, who advises retailers on supply-chain issues for Kurt Salmon. “Over time, people are getting more and more comfortable” shopping online, he says. That has hit retailers hard.
While total online spending comprised 7.8% of all retail purchases in the first quarter, according to the Commerce Department, more than half the population, or about 190 million U.S. consumers, will shop online this year, according to Forrester.
That is enough to inflict plenty of pain. Department-store chains have been particularly hard hit as Amazon.com Inc. increasingly sets its sights on apparel and fashion. Macy’sInc. recently reported its worst quarterly sales since the recession, while Nordstrom Inc.,J.C. Penney Co. and Kohl’s Corp. all reported sales slumps. Big-box stores such as Target Corp. and Wal-Mart Stores Inc. eked out meager sales gains in their latest quarters.
“There’s going to be severe continued pressure on department stores because traffic is going to peel away from that channel towards Amazon,” said Randal Konik, retail analyst at the investment bank Jefferies & Co.
To show how quickly things are changing: Those surveyed said they now select two-day shipping 20% of the time, compared with 16% last year and 10% in 2014. “Amazon Prime is likely driving this increase as members select two-day shipping 31% of the time, compared to an average of only 8% for nonmembers,” according to the survey.
“They’re changing customers’ expectations because they’re giving them the low-cost shipping along with the speed. And then you change the mentality of the consumer…Now it’s the expectation.”
Though millennials make 54% of their purchases online, the rate of adoption by older people is growing at a faster rate. Non-millennials made 49% of their purchases online, according to the survey, compared with 44% in 2014.
And as for shopping by smartphone users: the survey found that 63% of millennials use their phones to shop, while 19% of baby boomers and 8% of seniors use their phones to make purchases.