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How do US consumers shop in 2020?

Between long-running (but sensationalist) anxieties about the “retail apocalypse” and a recent Frontline profile of Amazon, one might have the impression that the Seattle company stands to dominate the retail sector.  But this couldn’t be further from the truth. Despite Amazon’s incredible retail success, it faces competition from nearly everywhere.  Understanding why requires a broader look at trends in the retail sector.

When the Internet started to flourish, initially only a few businesses took advantage of the opportunities it offered.  Jump to 2020, and the world has completely changed. Today, nearly any company could be classified as a tech company, including what many consumers would consider “traditional” retailers like Walmart and Target. 

Most businesses, especially in retail, recognize that investments in online operations, in addition to maintaining physical retail presence, are necessary to compete in the current economy, blurring the artificial online and offline distinction. Innovative shopping options such as “buy online, pick up in-store” by traditional retailers, represent an effort to provide consumers with a seamless online and offline retail experience, sometimes called “omnichannel marketing”.  In a previous DisCo post, Matt Lane noted a year ago that Walmart, the world’s largest retail store, is growing its online sales 2.5 times faster than Amazon. Walmart made IT investments that surpass those of leading tech companies like Microsoft, and entered into partnerships with the latter to accelerate a digital transformation it started nearly 10 years ago.

Thanks to the expansion of retail shopping online, consumers now have access to an unprecedented number of goods and services, often times, at a global scale.  Consumers seem to be enjoying this new 21st century retail menu as the retail sector is thriving. The United States saw an annual increase in retail growth by almost 4% every year since 2010, driven by consumers and their ability to now purchase goods and services from over 1 million retailers.  

Consumers have optimized the way they shop before making a final purchase in light of the numerous options that are available.  Evidence shows that consumers take great care with respect to price comparison among retailers. For example, on Amazon Prime Day, one of the biggest online sales days of the year, a study found that 76% of Amazon customers visited other online stores before making a purchase on Amazon.

Consumer experience has also become as important as quality and price when making a purchasing decision. Research from MIT shows that prices remain largely the same online and offline, making price a non-determining factor when deciding to shop online or go to a physical store. As a result, consumers shop both online and offline indiscriminately.  This emphasizes how important it is for businesses to improve customers’ experience by offering new means of shopping and user experiences. 

In sum, consumers have optimized their shopping strategies by taking advantage of the opportunities to access a worldwide array of products, with  price and customer experience being a determining factor when making purchasing decisions. As the digitization of the economy continues, all retailers will need to continue to improve their services offered both online and off, in order to keep up with the consumer-focused competition that is defining the retail sector in today’s world.


Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.