Ever-growing US e-commerce market
The United States of America (USA) is home to over 320 million inhabitants and is ranked as one of the richest country in the world. The US market offers an attractive number of customers and is one of the greatest e-commerce market with a high internet penetration rate. Over 205 million e-commerce users actively use the internet for purchases with yearly sales estimated to $453 billion in 2017. This shows that not only the size and maturity of the market is exciting for businesses, but also the online savvy consumers and well-developed infrastructure. The digital market increased steadily and online purchases represents more than 10% of the total retail sales in the US. This number is foreseen to grow to $603 billion with an average online spending of $2,100 per person by 2021.
Amazon as the leader of e-commerce growth
The US-giant Amazon dominates the market (44% market share in 2017) and is held responsible for the current and future e-commerce growth. The power of Amazon is predicted to continue and could win over 50% of the US e-commerce market by the end of 2018. Even if the predictions come true, due to the size and different consumer preferences the US market is greater than its neighbours and Europe. Furthermore, the American’s are said to be international-minded online buyers. With 14% foreign purchases the US might not have the highest percentage of cross-border e-commerce, but still has a huge amount of buying power due to the high number of consumers. In USD, it is estimated to be around $50 billion in 2017 and within that amount the most popular products abroad are clothing and apparel, books and media, electronics, toys and beauty products. Next to the uniqueness of foreign products, brands and favourable prices are motives to do onlinepurchases abroad. Another burden, which Swiss retailers and SME need to bear in mind is that US consumers tend to be more impatient, therefore most US retailers offer free of charge delivery and increasingly same-day delivery options. Additionally, a study presented that average American consumer are attached to brands, as opposed to find the best value for money in their purchase decision. These might be reasons for the average international online purchases of Northern America.
US Implications for Swiss Businesses
Different sectors are represented within the top ten online retailers, illustrating that no sector dominates the US e-commerce market. In general, the “easy to ship” products also appeal to the US customer the most. Online platforms within the industries of clothing and electronics accounted for 35% of the total online retail volume in 2017, but also health and personal care products are highly demanded online. Furthermore, around 65% of US online shoppers browse at least one category per month. The most popular payment method are not surprisingly credit cards, as US consumers tend to be multiple cardholders with almost five cards per adult. Based on a survey (2016), credit cards are used for purchases by 73% and debit cards by 62%. Another increasingly more often used payment tools are digital payments such as mobile wallet apps. A further upcoming trend in the US is mobile commerce; the mobile share holds a strong position with 36% of the retail e-commerce sales. This number is said to increase by 17% within the next three years.
USA, the country of (un)limited possibilities
Entering the US market as a Swiss SME comes with fierce domestic competition. Even though the market size is a great advantage, it can also be regarded as a barrier with regards to logistics. Nevertheless, technology adoptions give the advantage of making use marketing efforts purposefully. EMarketer cites the following: “the top 10 US companies ranked by e-commerce sales will combine to represent nearly 6% of the total retail market in 2017. That means there is significant room for growth, as more retail categories continue to move online.” A recent example of the US being an e-commerce powerhouse with great possibilities shows a survey that even alcoholic products are more likely to be bought online if the customers had the option. There is simply no way to get around the US e-commerce market.