Americans spend a lot of money online throughout the year. Ever since ecommerce started in the 90s, it’s taken off and become a massive industry that serves pretty much everyone everywhere. From the giants like Amazon and eBay to the niche stores like ThinkGeek and Hunter’s Wine Shop, there’s no shortage of places for Americans to spend their cash on the Internet.
But what’s the actual amount of money that Americans spend on ecommerce every year? What are people buying? And, if you run or work at an ecommerce business, what are the takeaways for you?
Those are just some of the questions we wanted to answer with our look at how Americans shop online.
How Americans shop online
When you’re running your ecommerce company, these are the stats to keep in mind when you want to bring on new products, expand your business, or just improve brand awareness.
While the statistics are all well and good, their true value lies in their implications for the coming years.
And if the past few years are any indication, ecommerce is only going to grow over the next decade (at least!).
The first stat on the infographic is also one of the most impactful — 18- to 34-year-olds spend $2000 each on ecommerce every year. Also known as Millennials, this demographic currently makes up 75 million Americans, or 23.5% of the population. Combined with their $2000-per-person budget every year, they control approximately $150 billion in ecommerce spending power. For reference, that’s roughly the GDPs of Hungary and Zimbabwe combined.
When we narrow the demographic even further, we find that 18- to 24-year-olds spend 9% of their income online, which is more than any other demographic in the country. Right now, that statistic may not carry a lot of weight since many those people don’t have high-paying, high-power jobs.
But what’s important is their spending percentage. When a whole group of people (in this case, 31.5 million Americans) habitually spends almost 10% of their income online each year, that spells a lot of positive potential. As long as salaries and inflation stay consistent, those 30 million people will be a collective powerhouse for ecommerce in a few years.
But if you want to maximize the profits that your ecommerce store earns over the next 30 years, you need to understand how these valuable customers choose where to shop.
How shoppers choose
A total of 92.6% of ecommerce shoppers say images are critical to their purchasing decisions.
This is pretty consistent with everything else that we’ve heard about how people enjoy graphics, but it accents why images and photos are so important to the ecommerce industry. If you don’t use them, you’re only appealing to 7.4% of your potential demographic — and you can bet they’ll look for images somewhere else before they choose to buy from you.
So, when you add products to your ecommerce store, use photos. High-quality photos are constantly in demand in ecommerce, especially when customers can zoom in, swivel the product around, and look at as much of the product as possible. The more you can make it like they’re holding the product in their hands, the better their experience will be.
On top of that, it’s also important to embrace the power that’s carried by other companies’ logos, particularly when it comes to checkout. With 80% of customers saying they feel more comfortable when a site displays a major credit card company’s logo, your customers clearly seek an indication that you’re legitimate.
Display the logos of the payment options you accept prominently on your site, especially at the beginning of your checkout. You simply can’t afford to miss out on 80% of your business.
And beyond that, make sure you accept as many payment options as possible. Visa and the other major card companies are all well and good, but PayPal is a big deal, Amazon Payments has a steady market share, and Apple Pay might not be relevant right now, but in a few years — who knows?
Payment diversity is just another way of making your site easy to use. After all, why would someone buy something from you if they have to go out of their way to do it?
What people buy
Somewhat surprisingly, 69% of American adults buy clothing online. While this may not seem surprising if you’re part of this 69%, it’s kind of surprising when you consider that clothing is useless if it doesn’t fit right. And while measurement charts can help, it’s still a gamble considering modern clothing sizing makes zero sense — especially for women.
But still, somehow, clothing is the most frequently-purchased product type online with a full 10% spread over the next-leading product, digital content.
Beyond that, accessories like handbags and shoes are also hugely popular, plus personal electronics. And coming in last, with just 43%, are household electronics, like televisions and computers.
What this tells ecommerce businesses is that customers aren’t necessarily looking for the products that would make the most sense to buy online. After all, you can follow someone’s line of thought when they buy digital content online since it’ll probably be used on a computer, DVR, or game console. It’s a little harder to get in their minds when they want something that’s hit-or-miss, like clothing.
Steady climb in customers and sales
Over the past several years, ecommerce shopping has steadily grown in popularity, so much so that more than 215 million Americans are expected to shop online in 2018 (or roughly 66% of the US population). Considering that 191 million shopped in 2013 and generated $703.28 billion in B2C sales, 2018 will definitely be a year for the ecommerce history books.
However, one of the most interesting trends is the increase in B2B sales from 2006 to 2013. Like B2C sales, they’ve steadily increased over time. Unlike B2C sales, they don’t deal in billions — they deal in trillions.
Before we continue, please keep in mind that these numbers relate to the amount of money that Americans spend on B2B ecommerce in general —not B2B ecommerce with American companies exclusively.
With that out of the way — whoa. Provided this data stays consistent in 2014 and 2015 (and we have no reason to believe it won’t), it’s never been a better time to be a B2B company. Even if you’re a local business with two people running your day-to-day operations, you need a website — no matter how much it costs.
And once you do that, you should really look into an SEO plan because of the next stat.
Shoppers and search engines
Roughly 44% of online shoppers start their shopping experience with search engines. That’s almost half of your customer base, 30% of which starts with Google. If you want to get their business, you need to rank for the keywords they use to find what they want. And if you don’t, you’re constantly losing money to your competition.
(Shameless plug: WebpageFX is great with SEO, so call us to say hi sometime.)
Anyway, the point is that you need organic search results if you want to grow.
Could you get by without them? Maybe. But is that a risk you’d want to take with practically half of your customer base on the line?
Plus, if you’re a new business, there’s a good chance you don’t have the brand awareness to drive direct traffic. For you, SEO is essential.
And if you’re going to look into SEO, you should also check out social media because…
Ecommerce and social media
Facebook drives more traffic to retailers than any other social media site, almost double what Polyvore and Pinterest send combined. That’s no joke, and as a social network with over 1 billion users, you should already be on Facebook as it is.
Still, Polyvore and Pinterest play major roles in online sales, too. Polyvore only has 20 million users, and it’s designed around ecommerce, wish lists, and purchases. Plus, it produces over 1 billion impressions with its “sets” that users assemble, many of which are shared through Pinterest, Twitter, and blogs. That’s a pretty cool stat because it means Polyvore and Facebook audiences don’t overlap frequently, so you can target a lot of customers on two major networks without repeating yourself.
After that, Pinterest accounts for about a quarter of in-store purchases for discount retailers, and roughly one out of every eight department store purchases also came from Pinterest. That means Pinterest is still a huge resource for ecommerce businesses — especially with its brand new “buy buttons.”
The bottom line
Your ecommerce business has a ton of room to grow, even if you’re at the top of your industry. There is always another mountain to climb, always more data to mine, and always new strategies to try. Use these statistics to stay motivated to grow your business, and take your sales and revenue to new heights.
What do you think about these ecommerce statistics? If you own an ecommerce business, do you think these stats will impact your future decisions? Let me know in the comments!