Gallup claims it knows,
Americans with annual household incomes of $75,000 or more are significantly more likely than lower- and middle-income Americans to say they are “very likely” to do at least some of their holiday shopping online. In fact, the Internet looks to be the most common place to find wealthier shoppers this holiday season, with more saying they will shop online than in department stores, discount stores, and specialty stores.
At the other end of the spectrum, many fewer of poorest Americans, those who make less than $30,000, are likely to shop online– only 15% are “very likely” to do so, according to those polled. That is against 50% among those who make over $75,000.
So, where do the people at the bottom rung of the shopping spectrum shop? Most likely in “department stores” and “discount stores” which add up to 81% together.
If the data are accurate, Amazon (NASDAQ: AMZN) has yet one more advantage financially against its bricks-and-mortar competition. High dollar amount per purchase is a retail Holy Grail. If the logic is not too tortured, the rich spend more than the poor do–at least according to laws of consumer spending.
The logic can be further advanced than what Gallup’s research shows. Walmart (NYSE: WMT) has readily admitted it tends to cater to the poor and lower middle class. At least it has the floor space to accommodate millions of people. What it cannot make per customer, it can in volume. That is the most modest of blessings, based on the costs to operate a retail location, if only the expenses of the real estate, building, and workers.
The Gallup data tell one other thing. Unless traditional retailers use whatever they have through brand power and promotion to get their customers to switch from the parking lot to the PC, their margins will probably erode, as they have been for years at many retailers. Walmart says only 5% of its shoppers use Walmart’s online properties. That is a dismal number, taken Gallup’s information.
E-commerce has a number of advantages–among them the low-cost of doing business, and the 24 hour availability of online cycle. Based on the new Gallup poll, add one more