Someone in the Middle Ages invented the trade. Then Amazon came.
Have you guys bought anything on Amazon for Prime day? If not, you are the only one who didn’t :). Even though the website crashed a few times due to the incredible volume of traffic, the day was certainly a huge success for the company. Amazon announced the day after that more than 100 million people bought something on the platform in 1 day. We don’t have results on revenue but we are anticipating that the company cashed in something north of $5 Billion in 24 hours. Impressive right? Imagine what it would be like to fulfill all those orders and deliver the packages.
The same day, the Seattle based company announced that they own 49% of the e-commerce market. So, every 2 online purchases 1 occurs on Amazon. And what’s even more impressive is that they have 5% of the overall USA retail market. They are monopolizing the retail market (just to give you an idea, the second largest online retailer is E-bay with 6.6% of the market, Walmart is at 3.7%) and they are the second most valuable company in the World, just behind Apple by a few billion dollars.
How can we compete in this market? And most importantly, does it even makes sense for organizations to open up/maintain their owned online retail channel? And how far will they get?
What does it mean for us marketers?
It feels like we don’t have many options here. It’s either work with Amazon or with Amazon. There’s no other way around it. The only reason we would shop on any other website is because of a higher value proposition. And this can be provided in two ways:
- I get more for the same money (enhance the offering but maintain the same price)
- Lower price point (Same article but cheaper than Amazon on the owned site).
For everything else, we, unfortunately, need to rely on the e-commerce giant. Owned platforms are becoming a discovery tool. Users go on .com to see the product ranges but the actual transaction happens on Amazon.
It’s just too easy too, reliable and too fast and it makes sense for the users. So, Amazon and shopping are becoming synonyms and it will be interesting to see what happens when the platform will branch out to selling services rather than just retail. Organizations (whatever they are selling) need to jump on this really quickly because we are not that far away from an all-digital purchasing experience.