Online shopping is growing in popularity as many U.S. shoppers prefer to search for deals online rather than to search through brick-and-mortar stores.
New research indicates that consumers are taking advantage of the growing online marketplace. In Mintel’s Online Shopping U.S. 2015 report it is revealed that over two-thirds (69%) of U.S. online adults shop online at least once a month, with 33% shopping online weekly, up from only 24% in 2014. Online spending is on the rise as shoppers surf the Web for the best deals on products and services.
Despite 28% of online shoppers agreeing that they always choose the online retailer with the lowest price, consumers are averaging $114 per online order, driving online retail sales from $264.2 billion in 2013 to $304.9 billion in 2014. Contributing to online shopping cart order size is the motivation for consumers to meet or exceed minimums for free shipping. Mintel research shows that free shipping is central to many online shoppers’ experience, so much so that nearly half (48%) of online shoppers admit to occasionally increasing the size of their orders to hit the free shipping threshold.
“I want” trumps “I need” for online purchases
Mintel’s research shows that the selection of products consumers buy online depends on whether they have an immediate need to use them. The most frequently purchased products by online shoppers in the past year were books/eBooks (29%) and women’s apparel, which increased from 25% in 2013 to 27% in 2014. Online shoppers also ordered footwear (16%) more frequently in 2014, up from 12% in 2013.
The common feature behind the top three categories consumers report purchasing online, including clothing/accessories (62%), electronics (54%) and games, toys and school supplies (37%), is that they contain items purchased occasionally, rather than items to be consumed in the immediate or near future. Research indicates that the more in-demand items are less popular among online shoppers, including personal care items (31%) and furniture/home decor (30%).
“Retailers who specialize in occasional purchase categories, like clothing and electronics, were some of the most successful in converting their sales mix to include higher levels of online orders in 2014. For retailers that rely on consumables as a staple, integrating online sales proved less successful despite the availability of same-day delivery and in-store pickup,” said Billy Hulkower, senior technology analyst at Mintel. “The dominance of apparel, accessories and electronics among the products most commonly purchased online helps to delineate sweet spots for online retailing. All of these products are prime candidates for impulse buying, but at the same time, do not generally fulfill immediate needs. Additionally, online women’s apparel and footwear purchases increased in 2015, suggesting that shoppers, particularly women, are warming to the idea that they can try clothes on at home and simply return products they don’t want.”
Online shopping increases with kids in the household
Among demographic differences, the most notable is the frequency of purchases and purchase size related to the number of children under age 18 in the household. Only 23% of online shoppers without children at home make weekly online purchases, compared to 40% with one child, 56% with two children, and 66% with three or more children. According to Mintel research, the average online order is larger based on the number of children in the household; the average order for households with one child ($123) is significantly higher than that of households with no children ($78). This increases to $177 per order for households with at least three children.
Furthermore, households with more children are more likely to be enrolled in an automatic online reordering service. Among online shoppers in households with three or more children, 22% reported using an online reordering service, as opposed to 6% of those with no children in the household.
“Parents with children at home are more likely to be weekly online shoppers, driven by the combination of a greater need for supplies for their larger households and limited time for shopping in their busy schedules. In addition to the convenience of online reordering and potential cost savings on items, online shopping can free parents from challenging trips to the store with children who are likely to lobby for unnecessary purchases,” concluded Hulkower.