February 23, 2011

Online retail is dominated by affluent shoppers

NOTE: This post is old, and is probably on different subject matter than my current writing. It is possible the information is outdated or my opinions have changed. -- Josh Klein, May 28, 2012

Some interesting data:

According to comScore’s “State of the US Online Retail Economy in Q2 2010″ from August 2010, 37% of total US online spending is done by households making at least $100,000 (upper middle class and wealthier, by their definition).

Since only 10% of US households have incomes greater than $100,000, their representation of over 1/3 of dollars spent online is striking.

Although there could be cultural reasons, I suspect the primary causes of this skewing towards a wealthier online consumer are:

1) Access – wealthier households probably have disproportionate access to computers, broadband and credit cards.

2) Discretionary income – wealthier households probably have a higher proportion of their income left over after purchasing necessities that are mostly found offline (rent, groceries, cars, gas, utilities, etc.)

Two practical conclusions to draw:

1) Your online customers are probably more affluent than your in-store customers.

2) Online communication will reach a denser population of affluent customers.

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