How will shopping behaviour evolve on Amazon in 2024? How will inflation, artificial intelligence, or social media developments affect buying behaviour on Amazon?
Jungle Scout’s Consumer Trends Report allows us to dive deeper into these issues and reflect on how they will evolve over the course of 2024. The report looked at the spending habits and preferences of 1,000 US consumers in the first quarter of 2024.
Inflation has hit US consumers hard over the past few years. The effects of this on online shopping are primarily reflected in increased price sensitivity among consumers. As many as 79% of respondents reported that inflation and the uncertain economic situation were affecting their spending behaviour.
On Amazon, the biggest impact was seen as a fall in average prices across 15 out of 24 product categories. The impact of inflation is also seen in changes in sales trends across categories. Sales of hobby equipment and non-essential products such as toys, games and household appliances saw a shrinkage in both price and sales volume.
At the same time, so-called essentials such as pet products and toiletries continued to grow in price and sales volume, showing less impact on price sensitivity among US consumers. Despite this, more than 70% of consumers reported price as the single biggest driver of purchase decisions in Q1 2024.
Despite the survey, it is important to remember that a fall in average price effectively means a fall in overall price levels and not, for example, that only the cheapest products have the demand and ability to compete on Amazon. The survey is also limited to a subset of US consumers, but gives a good indication of the reaction of consumer behaviour to inflation and wider economic uncertainty.
How can an Amazon seller ensure sufficient target margins as average prices fall? Read our blog: How much do brands pay for their sales to Amazon – and why?
Amazon remains the most popular place for consumers to search for online products, but there is a clear generational gap in search behaviour on other channels, especially social media. Almost 40% of Gen Z consumers start their product search on YouTube or TikTok, surpassing even Google as a search engine.
Social media also increased its share as a direct purchase channel. Already one in five consumers say they are likely to buy directly from TikTok, Instagram, YouTube or Facebook. TikTok is the latest social media channel to enter the commerce space with the launch of the TikTok Shop in September 2023, to which up to 20% of Amazon brands and sellers plan to expand in 2024.
Additional reading: Where do you first look for products when you consider shopping online?
Emerging technologies continue to transform the shopping experience
New and emerging technologies, such as augmented reality (AR) and artificial intelligence (AI), will continue to evolve the online shopping experience and shape consumer behaviour.
For example, Amazon’s “View in Your Room” is an AR feature that allows shoppers to “place” products in their real environments. This allows larger products, such as furniture, to be adapted to the dimensions and interior design of the home before the purchase decision is made. Although awareness of this feature is still growing, the majority of consumers who are aware of this option use it when shopping.
31% of consumers who have used Amazon’s “View in Your Room” feature say it has led them to buy something online that they would otherwise only buy on the spot.
Below is an illustrative example of how we can use the feature to match a new sofa, for example, to the dimensions of an office lobby and existing décor.
Artificial intelligence has become an important factor in e-commerce for both sellers and buyers.
At Amazon, various AI-enabled features are primarily aimed at improving the consumer shopping experience and seller conversion. These features include a function that provides a summary of the features highlighted in product reviews. These summaries are generated by AI based on the text of customer reviews, which consumers list as the second most influential factor in their Amazon purchase decisions.
Getting started on Amazon is quick and relatively inexpensive, but success requires an understanding of the e-commerce giant’s business logic. Getting to the top of Amazon’s search results requires a careful strategy and continuous optimisation. Our knowledgeable journey leaders will be happy to discuss your business’s potential in the ecommerce jungle with you – feel free to contact us!
