Almost 90% of UK shoppers use Amazon and 40% have access to its Prime subscription service, according to research that lays bare the challenge for high street retailers.
Most Amazon shoppers visit the online retailer at least once a month and just under a fifth once a week, underlining the retail dominance Amazon has gained. Its core categories of books, DVDs and video games are still the most popular purchases, according to the market research firm Mintel.
“Amazon is a phenomenon of 21st century retail. In a little over 20 years, it has grown to be a retailer that nearly all consumers use. It has achieved this through a relentless focus on customer-facing investment and innovation,” said Nick Carroll, Mintel’s associate director of retail.
“Amazon started selling books, but now holds a significant share in almost all retail categories, helped by the incubation of thousands of independent sellers through its marketplace scheme.
“The retail giant has expanded far past the bounds of normal retail operations into media streaming, consumer electronics and cloud computing. Amazon has built a platform that customers are both happy to use, and pay for the privilege of doing so via its various subscription services.”
Mintel estimates that as many as 15 million people in the UK, just over a quarter of the adult population, are now signed up to Prime, which costs £7.99 a month for unlimited one-day delivery on many items plus film, TV and music-streaming services. A further 13% of people share access through someone else’s account.
Carroll said Amazon had continued to gain market share by signing up Prime subscribers who spend significantly more than non-members.
Evidence of the extensive use of Amazon in the UK comes amid calls for a change in taxes and other assistance for high street retailers who are struggling to compete with their online rivals.
An influential parliamentary committee published a report last month that urged the government to consider taxing online sales, deliveries and packaging, and cutting property taxes for retailers as part of a package to help revive the UK’s ailing high streets.
Retailers called in November for decisive action from the government after data showed the number of shops, pubs and restaurants lying empty had soared by more than 4,400 in the first six months of this year.
Amazon, which has been widely criticised for paying relatively little tax in the UK and for poor pay and conditions at its warehouses, is often seen as the leader of online retail’s assault on the high street, and in some quarters even the main cause of store closures and job losses. Carroll, however, said Amazon was not “all conquering”.
“Amazon’s growth has no doubt wounded rivals, but it is not the ‘high street killer’ that it is often painted out to be,” he said. “Indeed, even if the retailer accounted for roughly 50% of the online market held by online-only retailers, it would only account for around 9% of all UK retail sales.
“And despite the popularity of online retailing as a whole, the vast majority (82%) of all retail sales in the UK still come through physical stores. This leaves much room for its own growth but equally for rivals to fight back.”