Young, Multicultural Consumers Fuel Online Retail Purchasing Growth In Key Categories

Do you  remember the first item you ever purchased online?  Or when you made that purchase? Online retail sales now represents $373 billion dollars or 11% of total retail sales and are expected to increase to over $500 billion by 2020, according to a recent MediaPost.com article. Nielsen Scarborough examined online buying categories to see which have experienced the largest growth over the past 5 years and to see how the profile of consumers making purchases in those categories has changed.

According to Nielsen Scarborough, the percentage of annual online buyers has increased from 54% to 67% in the past 5 years showing a 13% increase overall.  Some demographic groups, however, are showing more significant growth.  Adults 18 to 34 have had a 17% increase with 79% stating they have purchased online in the past year. While Hispanic penetration for online buying is lower than average, they have experienced one of the largest increases at 22%, from 41% to 63%. Lower income households have increased their online purchases by 18% since 2010, from 30% to 48%, compared to household incomes of $100,000+ which only increased 8% during the same time period. Online buyers are also 14% more likely to have one or more children in the household, a 15% increase since 2010.

The top 5 categories seeing the largest increases are clothing/accessories, books, home accessories, movie tickets and toys/games.  The clothing and accessories category showed the largest increase for online buyers with 12% growth. Adults 18 to 34, Hispanics, students, and households with children were the primary drivers of growth in this category.

Books showed the second highest growth with an increase of 7%.  Increases in online book purchasing mirrored the category average for gender, age, employment, income and ethnicity with two exceptions.  Hispanics grew from 13% to 23% and students from 27% to 37%.  

Home accessories also experienced a 7% growth during the past 5 years.  Not surprisingly, that growth was facilitated by young adults purchasing their first homes.  Adults 18 to 34 grew from 7% to 16%, and those who have been in their present homes for less than a year grew from 7% to 17%.

Online movie ticket purchases saw a 5% growth over the past five years.  Hispanics, students and white collar professionals all grew 8%, while Asians and adults 18 to 34 show a 9% increase.  Online buyers of toys or games also had a 5% increase overall with Millennials, students, and households with children showing the strongest contributions to growth in the category.

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Online buyers continue to grow  at double digit rates and this growth is being driven by young, multicultural, households with children. As online buying overall approaches saturation among higher income levels, strong purchasing among lower income individuals will continue to grow.  As smartphones and tablets make online purchasing more mobile and accessible, marketers can expect the online buyer profile to continue to change and morph with time.

Source: Nielsen Scarborough USA+ 2015 Release 2

Online Buyers – Any internet purchase during the past 12 months.

 

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