In 2021, the United States of America still has the largest GDP in the world at US$ 20.93 trillion 1 while still retaining the global number 2 spot in terms of eCommerce sales.2 This article follows up on our earlier article on the key trends of note to Southeast Asian merchants who want to sell to the United States by exploring key US consumer behaviours and insights.
Here’s a recap of the key trends driving the United States’ current eCommerce market:
COVID-19 accelerates eCommerce and newer types of shopping methods like curbside pickup and delivery app adoption beyond lockdowns - with between 70 to 80 per cent of people saying they’ll continue their new methods of shopping beyond COVID-193
USA’s retail sales showed signs of a recovery in the first half of 2021 driven by stimulus cheques and high vaccination rates.4
However, with stimulus drying up, July saw a drop in retail sales figures by 1.1 per cent year on year. These drops were attributed to stimulus payments drying up along with a resurgence of cases due to the Delta variant.5
One-third of US shoppers purchase cross-border, primarily driven by the items’ value for money
Between 30 to 40 per cent of shoppers in the United States increasingly switch brands. These switches are driven, in decreasing order of importance:6
Value for money
Purpose-alignment (aligns with the shopper’s beliefs and values)
Younger shoppers and higher-income shoppers lead the way in terms of online shopping, including for non-essential items like fashion and apparel.
This isn’t an exhaustive list of factors driving the United States’ eCommerce market but should provide sufficient context for those who wish to enter this market. With these factors in mind, we can now look into the question: “What United States consumer behaviours and habits should eCommerce merchants look out for?”
Quick Snapshot of the United States’ eCommerce Shoppers
Below are some key statistics on online shoppers in the United States. There are more details on other aspects of them such as the products they are buying and the social media sites they frequent further on.
Number of eCommerce Shoppers in 2020:7
256 million shoppers
77 per cent of US population
US Consumers’ Average Annual Spend Per User: US$ 1,686 8
Total Social Media Users
72.3% of US population
240 million active social media users*
97.2% of social media users access it via their smartphones
*May not represent unique individuals
The age group with the most people shopping online are millennials, followed by 35 - 44 year olds based on Statista’s information from February 2020.
However, this information is likely to be different today considering the influx of first-time shoppers during the Q2 2020 COVID-19 lockdowns which took place after the survey period. McKinsey adds that high-income earners are also more likely to purchase nonessential items to treat themselves. McKinsey also noted that these groups were among those who were driving retail fashion apparel and at-home-entertainment sales recovery in early 2021 when optimism was buoyed by high vaccination rates and government stimulus cheques. 9
The age distribution of digital buyers in the US as of February 2020 is:10
14 - 17 - 5.2%
18 - 24 - 13%
25 - 35 - 20.2%
35 - 44 - 17.2%
45 - 54 - 15.5%
55 - 64 - 14.6%
65+ - 14.4%
While the economic situation is currently uncertain (as written in early September 2021), as eCommerce merchants it might make sense to target these two groups. But how likely are they to shop cross-border? What channels should you use to reach them and what do they look out for when it comes to switching brands?
United States Shoppers Have Been Switching Brands Searching for Value, Purpose Alignment, Quality and Novelty, with One-Third of eCommerce Purchases being Cross-border
Our earlier article mentioned that there are four main reasons for US shoppers to switch brands. The original McKinsey report included other reasons that were grouped together with the main 4 which we’ll explore below:11
Value’s reasons included better value, better prices or promotions, better shipping and delivery cost and larger package sizes. Considering the United States’ current uncertain economic climate as of Q3 2021, there are likely more consumers who are tightening their belts. Around 40 per cent of US consumers have cut back on spending on nonessentials, and are just focusing on basic necessities like groceries and household supplies.12
On the other hand, searching for good deals is also a key reason why US shoppers buy from overseas too.13, 14 Around a third of US eCommerce purchases are cross-border (US$ 270.1 billion out of US$ 795 billion). The top 2 countries they buy from are China (49%) and the United Kingdom (12%).15 Just like back in Southeast Asia, price competitiveness is one avenue to factor into your US eCommerce campaigns.
Purpose Alignment or Purpose Driven
Purpose driven reasons include buying products that are more sustainable or better for the environment, buying from a company that shares their values, and buying from a company that treats its employees well.
In terms of sustainability, Forbes found that online searches for “sustainable fashion” tripled between 2016 and 2019 which they credited to Millennial and Gen Z consumers.16 The demand for more sustainable options led to established brands adapting their products to include waterless products, upcycling, carbon neutrality or refillable packaging solutions, Mintel reports.17
The State of Fashion 2021 mentions that “54 per cent of consumers believe brands ‘have an important role to play in social conversations about issues like #MeToo and race relations’...66 per cent of consumers would stop or significantly reduce shopping at a brand if they found it was not treating its employees or suppliers’ employees fairly.”18
Quality and Novelty
The final two reasons above include the following statements: Better quality, products that are natural or organic and trying products they’ve never tried before or going for changes from their normal routine.19
Putting it all together, what this means for merchants is that there are multiple ways you can position your products depending on who you’re targeting. Price competition is good for the mass market, but you may also be able to attract other audiences by catering to their sense of purpose, sustainability or just pitching yourself as an interesting alternative.
2020 Saw Purchases Driven By Adapting to Work and Life at Home, But There’s Pent Up Demand Ready for When COVID Subsides
2020 saw lockdowns initiated across the United States around Q2 2021, with the height of it taking place between late March and early April.20 These restrictions included “shelter-at-home” orders or similar initiatives to minimise social activity and reduce COVID-19 infections.
This increased need to adapt to life at home informed most people’s purchase decisions. With work from home arrangements showing signs of persisting after the lockdowns, some of the changes discussed below might stay for the foreseeable future.
These are the product categories that McKinsey noted saw sustained growth throughout 2020, which means that their growth didn’t slow down for the whole year:21
Software and Electronics
Software and Electronics
Software and Electronics demand was driven by work and learning from home arrangements required due to the safe distancing restrictions. Reuters in March 2020 reported surging demand for laptops and network peripherals as companies rushed to develop their work from home arrangements.22 July 2021 saw computer peripherals maker Logitech continue seeing high demand for their products - even reporting higher operating income and sales for this period.23
For now, it is difficult to say which trajectory consumer electronics demand will head towards considering Q3 2021’s uncertain economic climate and uncertainty around USA’s reopening in light of rising Delta cases this quarter. But if you’re selling consumer electronics, keep an eye on work from home trends. This is considering that there is serious discussion about whether this arrangement will persist even after COVID-19 passes completely as people started noticing increases in productivity during the earlier period.24
Cosmetics in total saw a rough patch in terms of overall sales in 2020, but saw its eCommerce channel sales grow by 35 per cent that year.25
2020 saw a trend of self-pampering routines, which Euromonitor estimates could continue into the rest of 2021. These manifested in products such as cosmetic kits for stress therapy and facial and body self-care sets which “combine multiple product categories and make self-care goals easier to achieve.”26
With consumers looking for natural and sustainable items, beauty brands have been developing products to match these expectations. New product features include refills, upcycled packaging made from waste or biodegradable material usage among other new developments. There is also a market for natural or organic cosmetic products as highlighted in the brand switching section above from McKinsey.27
Sporting Apparel and Fashion’s Rebound
Similar to cosmetics, the category’s sales as a whole suffered in 2020, but was bolstered by increasing eCommerce sales to offset some of the lost demand.
The self-care and wellness trend extended to adopting healthier habits like more exercise. This translated to sustained growth for the sporting apparel industry, but only after the height of the stay-home restrictions after early April 2020. This growth even extended to the first half of 2021.28
Women’s sportswear, or athleisure items, demand was driven by increased focus on activities like home workouts, running, yoga, Pilates.29 With the current climate, other categories in sporting apparel that did well include products related to individual sports and the home exercises seen above.
McKinsey also says that athleisure is a trend is likely to continue in addition to the sustainability trend.30 In terms of sustainability, adidas has been integrating sustainability into its strategies in recent years, such as partnering with environmental organisations.31
Fashion as a whole saw a rough patch in 2020. These low sales figures can be associated with social gatherings being limited amid a long period of uncertainty, which led to people spending less on nonessentials.
Fashion actually saw recovering sales figures with McKinsey noting that online spending in apparel and footwear in the first half of 2021. They noted that the effect was “strongest among high-income earners, consumers in the Northeast, and Gen Z”.32
When asked “With regard to products and services you will spend money on, do you p[lan to splurge/ treat yourself in 2021?” the group that was most willing to do so were Millennials (25 - 40 year olds) with income above US$ 100,000 a year.33
If you’re looking to try selling your fashion items, sportswear, cosmetics or consumer electronics to the USA, it pays to arm yourself and your shoppers with a great shipping experience. Janio Asia ships internationally from Southeast Asia to USA from end-to-end wherever your shoppers are in the USA. Contact us to find out more.
Homewares, Home Furnishing
With more time being spent at home along with flexible working arrangements, people in the United States invested in making their spaces more comfortable and investing in activities like cooking and baking.
Home furnishings saw higher demand as people wanted to have more comfortable spaces for at-home entertainment, work-from-home setups and learnings from home. Euromonitor reports that this led to higher sales of kitchen products such as stove top cookware and bakeware.34 A flour shortage was reported in the country at the end of March 2020 due to all this demand.35
Both homeware and home furnishing could see less demand in 2021 and beyond with the coming reopening, but as similarly touched on with consumer electronics it depends on the broader situation. With cases still appearing as recently as August 2021, reopening plans could be delayed which could lead to people continuing to spend more time at home.36
All the time spent isolating from others also led many households to adopt pets to help see them through the lockdown periods in 2020. This led to sales in the pet product industry surpassing US$ 100 billion according to the American Pet Products Association (APPA) during that period. They credited the growth trends including the “humanization of a growing pet population and sales of premium pet products.”37 The humanization of the pet population meant a pet focus on ‘human-like’ areas such as a healthier lifestyle, more fitness and well-being.
However, with lockdown restrictions easing early in 2021 the environment began returning back to normal which meant that people had less time and money to be able to care for their pets. In July 2021, it was reported that dog shelters began filling up as lockdowns began easing.38, 39
Thanksgiving, Black Friday and Cyber Monday Are All Part of the Main United States’ Shopping Period
Black Friday and Cyber Monday are known as being the biggest shopping days in the United States.40 Frenzied shoppers flooding into stores or fighting each other for amazing deals tend to be part of the experience each year.
If you have established a consumer foothold in the USA, chances are you are already preparing for the “U.S.Cyber Five” weekend, which saw massive online channel growth relative to quieter offline sales. With the current COVID case uncertainty in Q3 2021, there is a decent chance that this shopping period will also take place largely online.
In 2021, Thanksgiving weekend falls from 25th November to 29th November. This weekend is known as the “U.S.Cyber Five” which consist of:
Thanksgiving Day (25th November 2021)
Black Friday (26th November 2021)
Small Business Saturday (27th November 2021)
Sunday (29th November 2021)
Cyber Monday (30th November 2021)
In 2020, Black Friday and Cyber Monday still had massive sales figures, but this time with calmer brick and mortar store fronts.41 ABC7 News reported that this has to do with many major retailers not opening on Thanksgiving that year and that they shifted most of their deals online. The same report mentioned from Deloitte that “51 per cent of people say they don’t feel comfortable shopping this year,” which was reflected in this calmer weekend.42
Amazon reported the independent businesses selling via its marketplace sold more than US$ 4.8 billion in worldwide sales from Black Friday through Cyber Monday in 2020, representing a 60 per cent boost from a year earlier.43 Adobe Analytics estimated that the Thanksgiving weekend sales could have come in around US$ 10.8 billion and US$ 11.4 billion.44
Reaching US Consumers: Social Media, Top Platforms and Cross-border Shipping
The top 3 most popular social media platforms in the United States are Facebook, Instagram, and Pinterest according to Digital 2021 USA.45 Tiktok, which is 6th on the list, is worth noting 62 per cent of their United States users are aged between 10 and 29 - which also includes the target Millennial demographic.46
Below are the top social media platforms in the United States based on percentage of internet users aged 16 to 64:47
Facebook - 73.4%
Instagram - 56.6%
Pinterest - 35.4%
Snapchat - 32.1%
Linkedin - 28%
Tiktok - 25.8%
Reddit - 23.1%
Below are the top 5 US Retail eCommerce Companies based on eMarketer’s February 2021 data:48
Amazon - US$367.19 billion total eCommerce sales
Walmart - US$ 64.62 billion total eCommerce sales
eBay - US$ 38.67 billion total eCommerce sales
Apple - US$ billion total eCommerce sales
Best Buy US$20.34 billion total eCommerce sales
If you’re an eCommerce merchant based in Southeast Asia, setting up on Amazon and eBay might be worth considering. However, if you want more control over the website experience, hosting your eCommerce store on Shopify is also a good way to go. Whichever method you choose, you’ll need to invest in marketing to get word of your store, products and brand to your future shoppers in the United States.
For those testing the waters in the United States, it makes sense not to go all-in and set up local distribution capabilities due to their high commitment, high set up time and high costs until you are sure that you have the volumes to justify the investment. Instead, consider cross-border shipping where you won’t need to hold any inventory in the United States at all. Janio Asia’s end-to-end cross border shipping solution is flexible enough to meet your US shipping needs. To find out more about how our services can help you, contact us at our website.
This article was originally posted on Janio Asia's blog.
Janio is an integrated logistics solutions provider based in Southeast Asia, providing international shipping solutions across Asia including China, Hong Kong, Indonesia, Malaysia, The Philippines, Singapore, Taiwan, Thailand, and Vietnam.