EYE on RETAIL: Gen Z looks to spend less on Amazon

Survey finds 60% of Gen Z says Amazon is too powerful.

Zachary Russell

2/15/2024

Amazon's e-commerce sales are expected to reach $1.2 trillion this year.

A large number of young consumers think Amazon is too powerful, and are attempting to limit spending with the e-commerce giant.

According to a new survey from Mintel, while Amazon is the most shopped brand for U.S. online shoppers (84%), nearly half of Gen Z shoppers (47%) say they are actively trying to shop less with Amazon. This number is compared to 20% of Boomers and 40% of Millennials.

Six-in-10 (60%) Gen Z shoppers say that Amazon is too powerful, and another four-in-10 (39%) are "tired of hearing" about the e-commerce giant.

"The allure of Amazon continues to have a strong hold over most online shoppers. However, it may not always be the first choice for Gen Z shoppers,” said Diana Smith, associate director, client advisor of retail & e-commerce at Mintel. “Their shopping habits indicate a preference for personalization over privacy. They are inclined to discover new brands, which may not always align with Amazon's mass appeal. Amazon and other mass merchandisers may need to rethink their Gen Z strategy to increase loyalty from this demographic. The key lies in understanding how this generation thinks, shops, and perceives the world around them, which points towards unique and tailored shopping experiences.”

Despite pushback from younger consumers, Amazon’s e-commerce sales are expected to reach $1.2 trillion in 2024, according to Mintel research, a 9% increase over 2023. A 36% increase in sales is anticipated over the next five years (2024-28).

Amazon Prime membership has risen to an estimated 200 million worldwide, with 148.6 million members in the U.S., an increase of 33% since 2020. While nearly three-quarters of adults (73%) say Amazon is their favorite place to shop, and the majority (65%) start their online shopping journeys with Amazon, consumers remain open to other options when it comes to their Prime membership.

Nearly 20% of U.S. adults say they would drop their Amazon Prime membership if another brand offered equivalent benefits. Americans are also using competitive services to an increased degree, including Netflix (46%) and Spotify (28%). More than a third of Prime members (36%) are also Walmart+ members.

(This article originally appeared on HBSDealer's partner site, Chainstoreage.com.)