The Whole Foods acquisition by Amazon weeks ago was only the latest milepost in the latter’s inexorable march to the top of retail. The company sold $136 billion worth of products in 2016 – more than any other online retailer (and just over a third of what Wal-Mart did).
And we find that Amazon is big and gaining on Google for product-related searches (be they early or late in the purchase journey). This means that more and more purchase journeys will start on Amazon’s home page, and proceed via search to a variety of product pages all the way to a sale.
This changes a lot of things, but the upshot – to my mind – will be a massive outlay in product content and product-related experiences by manufacturers.
Jeff Domansky's insight:
Interesting angle: the number of product searches on Amazon is growing fast. What does it mean for content and marketing?
It’s easy to have missed some interesting innovations in retail with the past few weeks focused on Black Friday sales. Today, we’ve got a roundup of retail innovators and news to keep you up-to-speed on who’s getting industry and consumer attention.
First, we start with the announcement of Amazon Go – the online leader’s latest retail innovation which lets consumers pick up grocery products at an Amazon convenience store, pay by mobile app with their Amazon account and leave without a check out lineup thanks to innovative technology. Amazon also opens a drive through store concept early in 2017 in addition to new retail bookstores. With 2,000 or more stores on the horizon, that’s the sound of retail competitors shivering and the industry buzz is enormous.
Walmart is building new warehouse distribution centers and investing in new technology in order to keep up with Amazon. Not to be left behind, Target is developing and planning to open hundreds of new smaller-format stores in urban centers and college towns. Toys “R” Us launched a fourth new interactive toy store in Santa Ana, CA with interactive in-store displays including video screens, sound effects and motion-sensor lights.
Nike used the launch of its $720 HyperAdapt high-tech, self-lacing sneakers to generate consumer buzz and store visits. Ace Hardware and online marketplace The Grommet launched a “makers” initiative to sell 20 unique US-made products exclusively in its 160 stores. What’s ahead for retail in 2017? Social is king and influences everything. And of course, Amazon will continue to innovate and be the elephant in the shopping centers....
Jeff Domansky's insight:
Here's a great look at retail innovations and who's innovating and winning new customers online and in retail..
In the fourth quarter of 2015, Amazon.com Inc. posted a profit of $482 million, more than double its previous highest-earning quarter. In the two quarters since, profits continued to rise, to $513 million in the first quarter and $857 million in the second quarter. In the first six months of 2016, the company’s combined profit was $1.37 billion—no other half in Amazon’s history is in the same universe.
So after years of reporting little to no profit, Amazon is now posting record gains quarter upon quarter. At the same time, its expenses are growing faster—26.4% in the first half of 2016 versus 17.5% in the first half of 2015.
So what’s propelling Amazon into profitability? Let’s look at the numbers.
First, there’s revenue. Amazon’s compound annual growth rate from 2012 to 2015 was 20.5%.....
Jeff Domansky's insight:
Here's a look at why Amazon is 'suddenly" in the money.
Wal-Mart is offering free shipping with no minimum purchase on all online orders during the week of July 11, its latest move to steal some thunder from Amazon's much-publicized Prime Day shopping event, which takes place July 12.
SWal-Mart will offer the free shipping option alongside 30-day free trials of ShippingPass, a $49-per-year program giving members free two-day shipping on many items. Wal-Mart has seen daily ShippingPass sign-ups more than quadruple in a week compared to the previous week, Internet Retailer reports, although the retailer didn’t disclose how many customers have signed up.In addition to touting its shipping deals, Wal-Mart is holding a sale to rival Prime Day this year, as it did last year.
Stores including Target, Sears and Banana Republic also are offering deals coinciding with Prime Day, notes USA Today.Wal-Mart is aggressively targeting Amazon Prime Day, offering discounts on merchandise from televisions and clothes to furniture this week, Reuters reports.
And while Prime Day deals are available exclusively to Prime subscribers, Wal-Mart is imposing no such restrictions. “We believe saving money every day is better than just one, and that all customers should save, not only some,” Wal-Mart said in a statement....
TVs sold on Amazon.com were 15% less on the Friday after Thanksgiving than they were on Prime Day 2015, Market Track finds.
Amazon.com Inc.’s second annual Prime Day promotion takes place July 12, but if last year is any indication, shoppers might be better off waiting until later in the year for the best deals.
A report from retailer pricing, advertising and promotions tracking firm Market Track finds that on Black Friday 2015, televisions were 15% cheaper compared to Prime Day. Video games, meanwhile, were 12% cheaper on the day after Thanksgiving than Prime Day, which last year was on Wednesday, July 15. Amazon Prime is Amazon’s annual subscription where shoppers pay $99 and receive perks such as free expedited shipping.
Market Track examined the prices of nearly 400 items on both Prime Day and Black Friday 2015 across five categories: TVs, video games, laptops, small appliances and tablets. Of the five categories studied, small appliances had the least difference in pricing, with those items 3% cheaper on Black Friday than on Prime Day.
Overall, all categories studied were cheaper on Black Friday than they were on Prime Day....
Jeff Domansky's insight:
Bargains or busts on Amazon Prime Day deals? Research says not so fast consumers.
Big box retailer stocks are getting hit hard Wednesday, following Macy's dismal earnings report.
Macy's shares are down 13%, while some of the largest retailers like Sears, Target, and Nordstrom all dropped by at least 5% during the day.
Amidst all this, Amazon, the online retailer that just opened its first physical store last year, is trading at an all-time high, reflecting a clear shift in consumer behavior.
The growth of online shopping is nothing new. But this chart that compares the 12-month stock movement of Amazon, Walmart, Macy's, Target, and the retail index fund "XRT" clearly illustrate the online retailer's growing dominance in this space:...
Jeff Domansky's insight:
Retailers online and off-line struggle while Amazon crushes it.
Amazon's services are in constant evolution. Its growth is surely not threatened for the moment, on the contrary! Its innovative status is crushing its competitors and in the near future they'll maybe be the major retailer in the world, if they continue like this.
The e-commerce technology company announced on Monday a new Seattle location, Amazon Go, that has no registers. Instead, shoppers scan into the store with their free Amazon Go app, shop as normal, and leave the store with the items billed to their Amazon.com account.
While some stores have used a wedding-registry technique to allow this kind of shopping, Amazon takes it one step further. Using computer vision — the kind of technology that lets self-driving cars “see” — the store recognizes the user, making it unnecessary to individually scan items.
According to the Seattle Times, the 1,800 square-foot store, featuring ready-to-eat meals and snacks, is open to Amazon employees participating in a testing program. The store will open to the public in early 2017....
Jeff Domansky's insight:
Amazon is now testing three different types of retail – bookstores, pickup/drive-through and now, an innovative no cashier, no checkout, no lineups, convenience store. Retailers look out!
Amazon has been experimenting with the pop-up store concept for a number of years. They have opened up dozens of locations in malls all over the United States. It looks like Amazon intends on opening 30 new locations all over the United States so people can easily buy Kindle e-Readers, Fire Tablets and Echo Speakers for the holidays.
Amazon is on a hiring spree to find temporary and permanent employees, which suggests that the stores could be semi-permanent installations. They are looking for staff in Texas, Washington, New York, Florida and dozens of other States.
Additionally, it looks like Amazon is also looking to hire a major executive to oversee all of the pop-up stores and implement a unified strategy, design and stock each location with more products. Having a dedicated person in charge is a good move if Amazon plans on expanding this program in the coming years....
Jeff Domansky's insight:
Amazon plans to open more than 100 pop-up stores across the US.
In total, 2016 Prime Day was the biggest U.S. sales day ever, surpassing Cyber Monday 2015 by 19%, according to Slice Intelligence, which measures all digital commerce activity and customer loyalty. Slice also found that, on Prime Day, Amazon held 74% of the market share of all U.S. consumer ecommerce.
Sales totals aside, here are some significant takeaways from Prime Day pertaining to Amazon’s customer relationships:
By offering exclusive deals to members, Amazon continued to showcase the value and advantages of Amazon Prime. Membership continues to grow, from an estimated 75 million at the end of 2015 to 85 million now — with projections that it will reach 110 million by the end of 2016.
The deepest discounts seemed to be for Amazon devices such as the Tap, Echo and Kindle Fire. Despite the low cost, the premium devices align consumers even more closely with Amazon and make it easier for them to shop and order – thereby facilitating future purchases with the online retailer.
Prime Day also stimulated customer engagement through the Amazon app. Survey Monkey, which tracks mobile app usage, reported 12 million mobile users on Prime Day, a 50% increase from the 8 million users on an average day. Usage for the week went up 35% in all. Research further showed that 50% of Walmart app users also use the Amazon app — however, very few Amazon app users also use Walmart’s app, demonstrating Amazon’s dominance in the category.
The opportunity to reach new customers outweighed the negative experiences of others. Some glitches were reported, such as problems with checkouts early in the day and complaints on social media that sale prices applied to a limited number of products. But the record number of new subscribers far surpassed the number of shoppers who were dissatisfied with the event. Ultimately, Amazon may view that as a worthwhile trade-off, banking on the recurring revenue from new customers who will spend more time on Prime and increase their lifetime value....
Jeff Domansky's insight:
Good insight into Amazon's e-commerce strategies, dominance and impact on the industry.
Amazon is bringing back "Prime Day," its annual Black Friday-like sales event where hundreds of thousands of special discount offers are made exclusively to its Prime members.
Last year's inaugural Prime Day brought in an additional $400 million in revenue, according to JP Morgan. This year's event is expected to be even bigger in terms of revenue and the number of deals offered, making it by far Amazon's largest single-day sales event in history.
But according to a note published by JP Morgan on Thursday, the implications of Prime Day are much bigger than the single day's additional revenue....
Jeff Domansky's insight:
The one-day sales spike is just one of the many benefits of Amazon's "Prime Day," according to JP Morgan.
A one-star rated product listed on Amazon.com Inc.’s site sells better than a product with no reviews or ratings at all, said Chad Brandon, key account manager of Amazon for athletic footwear manufacturer Asics.
When it comes to new products on an online marketplace, reviews matter more than price, said Fahim Naim, founder of e-commerce consulting firm eShopportunity. Those insights were shared at the “Amazon & Me” workshop this week at the Internet Retailer Conference & Exhibition in Chicago.
Brandon and Nahim both suggested that first-party Amazon sellers, which are manufacturers that sell wholesale to Amazon, utilize Amazon Vine. The Amazon service puts products in front of customers to review. Amazon selects customers based on their reviewer ranks, "which is a reflection of the quality and helpfulness of their reviews as judged by other Amazon customers," according to Amazon. Sellers pay Amazon a fee for the service and can't influence whether the rating is positive or negative. Customers aren't paid to write reviews....
Jeff Domansky's insight:
Low ratings are better than no ratings on Amazon? Somehow I just don't get that. It feels instinctively wrong and my sense is it would be better to work harder to get positive ratings.
There’s no way around it—the past year has been rough for retail. Even the stalwarts have taken a hit: Nordstrom had a terrible run on NASDAQ; Macy's cratered, with its stock ending 2015 40% down for the year; and Walmart is shutting down over 250 stores nationwide. Why so much bad news, so fast?
Well, there are a few incidental reasons, such as an economy that has people saving instead of spending, and an unseasonably warm Q4 that kept families away from seasonal purchases, like a new space heater or down jacket. But, it’s also about a little company in Seattle called Amazon, which is steadily eating the world of retail. And when we say eating, we mean in one bite; according to The Motley Fool, about one of every three product searches begins at Amazon.
Just think about what this means for other retailers. A third of their potential customers are starting at their competitors’ front door, leaving them clamoring for scraps and losing costly acquisition dollars (and margin) to the likes of Google and, increasingly, Facebook. And as Amazon enhances Prime, their base of customers grows and becomes increasingly loyal....
Jeff Domansky's insight:
Valuable perspective on retail trends and how it will survive in the Amazon era.
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Interesting angle: the number of product searches on Amazon is growing fast. What does it mean for content and marketing?