Amazon UK’s 15th Birthday – what has it taught us?
Fifteen years ago, Amazon landed on British shores and thus started the ecommerce revolution in Britain. eBay didn’t arrive until almost a year later and, even then, buying online (and selling) was alien and slowly-adopted to begin with.
In 1998, Amazon was pretty much just a book seller. Jeff Bezos pioneered the Amazon model in the States and translated it here. And it is surely the publishing industry and book-selling that felt the brunt of it first. Think back to the 1990s and buying books and other media items like DVDs/Videos and computer games. You went to the High Street (HMV, Waterstone’s, Smiths, Virgin and others) and bought them there. Typically for full price. I can recall buying CD albums for £15 and VHS videos for similar sums and more. Books too were seldom less than cover-price, unless in a promo.
Amazon took some years, amid other changes in the industry, to break that stranglehold but the Seattle Start-up was instrumental. By flexing the muscles of its scale and having lower costs than High Street retail outlets it could discount quite heavily and found an easy market. When I see the couriers daily coming by my street, it’s astonishing to note how many of them brandish Amazon packages.
But for many years Amazon was just a retailer. eBay had the person-to-person selling market sewn up. It wasn’t until, say 2005, that Amazon came on to my radar as somewhere viable where businesses could sell too. And it hasn’t opened up to the smallest traders or the private seller yet. It has retained its brand as a retailer.
Now, I think, third-party sales might constitute about 40% of Amazon volume here in the UK (that’s a guess because figures aren’t really available.) But it’s become a vital sales channel for a great many businesses. Many people start on eBay and then move to Amazon. Others just go straight to Amazon and start selling there. But when you sell on Amazon you are absolutely required to meet the Amazon standards.
And it’s Amazon’s mentality as a retailer that has been instrumental in shaping British ecommerce. It has been the pace-setter on customer satisfaction and eBay has responded by cajoling (dragooning?) its sellers to adopt higher standards than might otherwise have been the case.
In particular, Amazon has led the way with delivery times and raised consumer expectations. They do ‘velocity’ very well. I’ll never forget buying my first Kindle and have it arrive at my door 17 hours later. I was blown away with that service (a few years ago!) and now next day delivery is increasingly expected as standard in ecommerce. And Amazon is now pioneering pick-up lockers and same day delivery too. The fulfillment of an online sale is now the key battleground.
And it’s on fulfillment where Amazon is increasingly going to compete. They’re investing heavily in depots and infrastructure. They know the logistics and procedure of ecommerce inside out and they’ve displayed a talent for the long game. And testament to that is the fear they seem to put into UK High Street retailers: big names are always putting the boot in.
What’s next? Who knows. But Amazon ain’t going anywhere and it pays to keep an eye on them.