BOSTON—November 15, 2021—New research from Bain & Company shows that US consumers are increasingly taking their holiday shopping online, projecting that non-store sales will grow by 9% over last year while storefronts will see a 6% growth. Although store-based sales have outgrown online sales for the past two quarters, e-commerce growth is primed for a holiday comeback. According to a survey by Bain and ROI Rocket, 77% of US consumers plan to do at least some of their holiday shopping online and 23% plan to shop online exclusively—with most consumers planning to do at least some of their shopping on Amazon.

Within e-commerce, sales are increasingly shifting toward online marketplaces—platforms where third parties can list and sell their products. This holiday season, 71% of consumers who recently shopped at marketplaces intend to do so again, and most plan to shop for both themselves and others, according to Bain’s research. Third-party marketplaces have heavily contributed to recent e-commerce growth, outpacing first-party online sales over the past several years and rising in popularity during the pandemic.

In addition to the well-known marketplace players, traditional retailers are also increasingly using marketplaces to complement their existing e-commerce offerings. More than 20% of the top 100 US retailers now have bolt-on marketplaces—more than double the amount in 2016. Given their clear upside potential, with lower technological barriers to entry for retailers and one-stop convenience for consumers, marketplaces will likely continue to see accelerated growth, especially amid product shortages this holiday season.

Amazon: A multi-category marketplace that thrives on holidays

Bain & Company expects Amazon, the exemplar of scale multi-category marketplaces in the US, to capture up to 45% of US e-commerce spending in the second half of 2021. According to Bain’s survey, a staggering 89% of US online shoppers plan to buy from Amazon this season, and most expect to spend more than, or at least the same as, last year—citing their confidence in Amazon to provide the items they are looking for, delivered in time for the holidays.

Understanding that delivery times majorly impact customer loyalty, Amazon has heavily invested in its delivery service operations. As of this year, Amazon’s facilities are located within a 60-minute drive of about 77% of the US population—up from 71% in 2020 and inching closer to Walmart’s 99%. The internet titan is expected to use its own fleet to deliver three out of four packages in 2021, saving Amazon up to 50% per package compared with retailers using traditional carriers.

Category specialists have an opportunity to shine this holiday

Although it remains a formidable competitor, Amazon is not invincible. Since 2017, Amazon’s Net Promoter Score℠, which measures customer loyalty, has decreased in seven out of nine core retail categories—spanning from consumer electronics to beauty—with category specialists, such as Sephora, claiming the top spots.

Category-specific marketplaces have been outgrowing their respective categories and are poised for a strong holiday season. By offering unique assortment and more personalized shopping experiences that favor product discovery, they are able to gain an edge over Amazon with shoppers seeking inspiration for the perfect holiday gift. This holds particularly true for young shoppers—Bain’s survey found that 28% of Gen Z online shoppers have made a purchase from specialist marketplaces in the past three months.

“The success of category-specific marketplaces indicates there is still room to not only survive, but thrive, in an Amazon-dominant world,” said Aaron Cheris, head of Bain & Company’s Americas Retail practice. “Few retailers are likely to be able to win head-to-head against Amazon on breadth of assortment. Instead, top retailers should try to nail the basics of customer experience by building compelling and distinctive product selections, enabling inspiring product discovery journeys, and building trust and loyalty programs that captivate their most valuable customers.”

Editor's Note: To arrange an interview, contact Katie Ware at katie.ware@bain.com or +1 646 562 8107.