The Greatest Online Consumer Shift In The US Market [An Analytical Report By TechnoScore]

The online market in the US has grown significantly in the past few years and there has been a great shift in consumers’ tastes and behavior. B2C marketers in the US have dug deep into several aspects to find the key that unlocks the potential to target maximum online users. Some have succeeded partially while others are still just clueless. With the added fact that online customers in the US are very capricious, it becomes evident that if you fail to understand the way they think and approach online products and services, all your marketing strategies may go futile.

This analytical report (courtesy of the TechnoScore eCommerce Development & Research Team) sheds light on the transformational consumer shift across the USA and its impact on the online retail market at present.

We hope this report offers some valuable insights into the biggest consumer shift in the US online market that will help you understand your customers better and deliver what they expect from you.

Some Interesting Facts & Figures On Online Shopping Behavior In The US

• More than 256 million people in the US shop online and it’s expected that this figure will reach 291 million by the end of 2025.
• Retail eCommerce sales in the US can increase by 14.6% between 2022 and 2025.
• 51% of US consumers bought online through their smartphones.
• More than 53% of consumers accept that they switch to online shopping simply to avoid crowded places.
• It is estimated that by the end of 2025, 80.4% of the American population will shop completely online.

Factors Affecting Online Shopping In The US

• Price: 70% of Americans agree that competitive pricing remains a major factor that influences their online shopping decision.
• Delivery Cost & Speed: High shipping cost is the primary reason behind cart abandonment while free shipping remains the primary reason to switch to online shopping.
• Customized Product Categories: Almost 46% of American online shoppers don’t mind paying more for personalized products.
• Deals & Discounts: 74% of Americans look for exciting offers to decide on where and what to buy online and nearly 62% agree that they find it difficult to complete a purchase without searching for an offer.
• Brand Reputation: According to a survey by Salsify, nearly 46% of US respondents are willing to pay more for a brand name that they trust.
• Mobile-friendly Web Page: The mobile retail eCommerce growth in the US was USD 430 billion in 2022 and more than 41% of respondents shop online every day or week.
• Flexible Return Policies: This is another major factor that influences the online shopping decisions of Americans. Having a straightforward return policy builds a sense of trust among online shoppers.

Our Recent Findings On Online Consumer Shift In The US Markets

The TechnoScore team has worked extensively on collecting consumer data across the US from authentic sources and compiled them into a detailed report. The research includes data from different geographical regions considering online spending on various product categories. Here are some evident factors that will certainly help you re-evaluate the approach towards finding more online customers.

Consumer Base Is Becoming Extensively Diverse

There has been a great transformation in overall US consumer behavior over the last two decades. The population has grown and become much more heterogeneous. Millennials comprise 30% of the total US population at present.

Besides this, considering the geographical data from 2010 to 2020, we have noticed that movement to suburbs has remained almost the same but the data also exhibits a significant rise in the growth of younger consumers. The Next-Gen consumers or the young population migrating to suburbs on a wider scale is a critical factor that influences the migrating pattern. Moreover, the movement of people within the United States also shapes geographic markets. These trends have further fragmented the consumer base and each generation cohort emerges with its own set of requirements.

Now, if you look at these trends from different lenses, race, ethnicity, urban vs. rural, and geographical factors, it is evident that consumers can’t be just thought of in a generalized way.

Consumers Have Become More Educated and Are Spending Differently

If we look at the data over the past 20 years, we notice that the percentage of the US population with college degrees has increased significantly. Evidently, education has also impacted consumer behavior in many ways. This simply means that consumers are becoming more educated and knowledgeable. They seek information, act less on impulse, and are cautious about verifying things before initiating a purchase. They prefer shopping from brands that lay more emphasis on the personalization of products and offer much detailed information on them. Changing consumer values, i.e., conscious consumerism has also grabbed a great deal of attention in recent years. Educated consumers are focused on sources from where a product comes. They are worried about the ethical, moral, and environment-friendly aspects of their purchases. Moreover, they also consider factors like child labor involved in the production, supply chain transparency, sustainability, and various other factors before buying a product.

Growing Population Is Driving Retail Growth

In 2010, the US population was 309 million which has now grown to over 332 million (last updated on January 1, 2022). That’s an increase of more than 22 million in the past 10 years. During this same period, the retail sector has also been flourishing and continues to expand with emerging needs. If we look at online spending by age cohort, it clearly shows that American consumers are still buying online products at relatively greater levels. This trend is driven by changes in the competitive market and other factors bringing down the price per unit.

At the same time, the decreasing percentage of expense on online retail products is driven more by deflation instead of lower demand for those products and services. If we analyze the spending pattern of millennials, the differences show up in several expenditure categories. A growing share of their wallet expenditures has shifted towards health and care, housing costs, and education.

This prompted us to review some retail behemoths like Amazon, eBay, and Walmart to check how they have encountered both ever-increasing and under-penetrated online consumer cohorts. We found that Walmart remains popular among baby boomers and people with lower income groups. It continues to grow its digital sales across various categories while the change in share of wallet stayed within a tight range.

It’s Income, Not Age That Drives Online Spending

Our in-depth review of location-based and traffic data revealed that on-mall shopping is on a decline at 7.6% and the US shoppers are shifting more towards online purchasing due to added convenience and various other exciting features offered by online stores.

The myth that new-age consumers are glued to their devices and hardly leave their house has also been shunned. The only thing is, it needs to be viewed from a different lens; “Income”. The high-income group is opting for more fun outings whereas the low-income group prefers going out less frequently.

Besides several interruptions including the recent pandemic, American household incomes have grown significantly in the past two decades. There has been a decline in middle-class share as adults in the upper-income tier have grown significantly. On the contrary, the low-income tier has increased from 25% to 29%. The middle-income group has not grown as rapidly as the upper-income group people. This considerably depicts an upward shift in the overall income percentage of Americans. Hence, millennials and high-income earners have contributed significantly to the rise of online shopping.

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Also Read: Most Treasured Insights On eCommerce Web Development In The US

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People Have Less Free Time

Keeping oneself busy has become a trend now. According to a survey by OnePoll on behalf of H&R block, an average American has less than half an hour to spend as free time.

Almost half of the respondents in the survey also reported that they hardly get time to pay off their taxes. This depicts the way Americans keep themselves busy by prioritizing their tasks and then making an action plan or a to-do list to meet them all. Additionally, consumers have become more diverse than ever before in race, ethnicity, income, education, and migration aspects. This increased fragmentation combined with minimal free time leads to different subsets of consumers with distinct needs and competitive options. To penetrate such consumer groups, businesses will need to get very creative across all digital touchpoints and focus equally on the timing of their marketing efforts.

Price, Convenience, And Products Remain Top Preferences

A recent study by Sparkle Insights and TFC reveals that the pandemic had played a major role in influencing consumer behavior in America on a larger scale. Multicultural consumers across America prefer companies that are more responsible towards society and prioritize healthier, organic, and green products.

We also explored some crucial data on Amazon, eBay, and Walmart, and found that price remains the primary factor that Americans look for before purchasing anything online. The next major factor that affects their online shopping decision is the quality of the product and the convenience to get instant access to it. The good news for small-scale online retailers is that US consumers don’t even follow brands as they used to. Rather, the trend has shifted to more innovative and distinct products which come in varying varieties. So, if you want to hit the US market to grab instant attention from consumers, you just need to prioritize these three factors more than anything else.

Endnote

Online retailers need to contemplate the changing consumer behavior and revamp their strategies to ensure end-to-end satisfaction while keeping their ROI up. Targeting your audience in the present-day US market requires much detailed analysis of consumer behavior and tastes to mark your presence in the stiffly competitive US market. Our customized research can help you there by offering valuable consumer insights that can be used to form critical retain strategies.

For more such industry insights and analytical reports, stay tuned to the TechnoScore blog.