US consumers are becoming more diverse, and so are their spending habits – at least to some extent. One thing that all age groups, ethnicities and income levels have in common is that online’s share of their wallet has increased in the past two years, per a new report [download page] from Deloitte.
Prior research has found that, in general, Asian American households have the highest household income and tend to spend more on consumer goods than the average US household. Not only that, with virtually all Asian American households having internet access, a separate survey from Nielsen has shown that this group of Americans are also avid online shoppers.
With this in mind, it comes as no surprise that Deloitte’s research shows that the online spend share for Asian Americans between 2016-2018 was higher than any other racial or ethnic group – at 24%.
During that period, online’s share of wallet for Hispanic and Black Americans was somewhat lower (20% and 19%, respectively). According to new data from Pew Research, these two groups also have the highest percentage of adults who do not use the internet. However, while Hispanic and Black Americans seem to have adopted online shopping at a slower rate than Asian Americans, the data indicates faster rates of growth for these two demographic groups, with an average compound annual growth rate (CAGR) in online spending from 2016 through 2018 of 11% and 15%, respectively (compared to 5% for Asian Americans).
This data shows that groups that have been somewhat slower to adopt the use of online retail are now some of the fastest-growing. However, this may be because the earlier adopters of online shopping are reaching a saturation point. As a case in point, Nielsen data (cited above) shows that some 87% of Asian Americans had purchased online within the past 12-months.
That being said, the same patterns are evident when looking at different income groups. While the highest annual income group (more than $80K) dedicated the largest percentage of their spend online (27%), their CAGR in online spending was 7%. By comparison, the lowest annual income group (up to $35K), dedicated a smaller share (18%) of their spending online, but are upping their online spending at a faster rate (14% CAGR).
On a generational basis, Baby Boomers’ online share of wallet stood at 20% during the analyzed period – a percentage considerably lower than the 28% share of wallet that Millennials spend online. This is possibly due to entrenched shopping habits: while 8 in 10 Baby Boomers have shopped online, they still prefer to shop in store.
To read more, download the report here.