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Amazon now dominates online sales

By Chris Dawson December 3, 2015 - 10:40 am

©Bob Johns / UNP 01274 412222
Cyber Monday outdid Black Friday sales by all measures, which shouldn’t be too surprising. Traditionally Black Friday is a US holiday for many people who rush to the shopping malls whilst by Cyber Monday everyone is back at work and surreptitiously buying online.

This year Amazon once again dominated Black Friday sales on both Black Friday and Cyber Monday according to Slice Intelligence, with 38.8% and 36.1% market share each day. Their nearest competitors Best Buy (5.8%, 5.5%) and Walmart (3.3%, 3.8%) show just how far ahead Amazon are in dominating the online market.

Whilst this is an astounding feat for Amazon, it does have some interesting implications for online retailers, especially when they consider search on sites such as Google.

Google is the undisputed leader of search, and yet Amazon customers are bypassing Google product search when they want to go shopping. According to BloomReach, 44% of product searches start at Amazon with 34% using a search engine and 21% of users going directly to a specific retailer.

Unlike any other search engine, when a consumer uses Amazon they know that they’ll find a single product listing which generally shows the best deal available. Whilst price matching in the EU is illegal, it doesn’t seem to stop Amazon often having a highly competitive price if not the best on the net.

Prime subscribers know that for most products they’ll receive free expedited shipping. It’s only for products fulfilled by third parties that may not include the shipping cost in the price and even then if it’s a product in Fulfilment by Amazon free shipping is still on offer.

Marketplaces like Amazon and eBay also have another huge advantage of most retailers and that is massive app adoption. Most consumers will in reality use a very limited selection of shopping apps, but the chances are high that you’ll have either the Amazon or the eBay app installed on your smart phone and/or tablet. This ties you in to that destination to start your shopping and if you find what you’re looking for you’re unlikely then to do any price comparison… especially if you inevitably find a lot of the time that the marketplace is competitive.

Even if you compare prices, there’s friction with buying from an alternative retailer, you need to sign up and open an account or at the minimum you’ll have to tap in your address details and credit card number. Marketplaces already have this data stored so that with Amazon’s One Click Checkout you can purchase with a single tap of your mobile screen.

What does this mean for you as a retailer? Question one has to be as a consumer, how often do you see adverts for Amazon products on Google? I often see products on eBay but I rarely see paid links to Amazon… they don’t need to pay for traffic if people are starting their search on the site.

A high 30s percentage market share is phenomenal. How are your Amazon sales this year? Are you seeing a similar market share?

  • Kieran
    2 years ago

    “Whilst price matching in the EU is illegal, it doesn’t seem to stop Amazon often having a highly competitive price if not the best on the net.”

    Price matching is illegal? Really?, since when?, many big retailers do price promises or have price beating policies, have i misunderstood here?

  • james
    2 years ago

    the reason you see less adverts for amazon on google, is the affiliate program (as far as i’m aware).
    rather than see, say, three links direct to amazon for a product, you’ll find about forty different affiliate sites, each offering nothing but a link to amazon.
    – personally i think they sites are garbage, but they seem to offer a good return for amazon.

  • Sam O'levski
    2 years ago

    Does anyone else feel that the recent spate of ebay free listing promos is partly down to them being rather concerned over the widening gap between themselves and Amazon ?

  • 2 years ago

    Most of the time when I look for the products I find amazon
    Organic links on google.

    But these days most of the time I do comparison
    On prices with ebay or merchant website and
    90 % of the time I have found them cheaper.

    Buy box is really misleading these days as they dont
    Show cheaper plus reliable third party when amazon
    Themselves or FBA is present. Amazon even prefers to
    Show listing as temporarily out of stock when they don’t have
    Stock but third party has.

    So, shopping on amazon may be a good experience but not
    Cost effective for consumer.

  • ifellow
    2 years ago

    I think the bottom line is amazon is a real monster in online retail, happy to loose money or break even year on year to achieve growth at all costs. This is a company run on data analysis and statistics, that is designed not to compete but destroy competitors at all costs.

    Whilst amazon is an amazing company as a business analyst looking in its appetite for more market share will only ever grow and efficiency must be improved at a costs is the mantra.

    Amazon is a danger to all 3rd party sellers who become even more dependant on the platform and other online retailers.

    Simply put continued amazon growth in retail would not be a good thing.

  • Ian A
    2 years ago

    Amazon have become the household name go to site for a quick online purchase

    You can search and order and pay for an item in under a minute, you’re lucky if eBay will let you log on in that time

    I agree it’s bad for third party sellers as merchants are already selling stock at such low margins. Many watches are retailing for the same price they cost me to buy from the actual brand. Crazy.

    • ifellow
      2 years ago

      If you sell something that sells well,amazon will thing sell it under thier ‘AMAZON BASICS’ brand.

  • bigtimetrader
    2 years ago

    how are my amazon sales this year?
    very big, record revenue sales

    how is my amazon profit this year?
    only a bit more than last year, more sales but less profit due to increase competition

    am I a prime member?
    yes

    do I buy a lot on Amazon?
    yes

    have I got a fire tablet?
    yes

    do I like amazon as a shopper?
    yes but i am a very experienced online shopper and seller

    do i like amazon as a business partner?
    sort of, i like the fact i make money by selling on there

    do i think amazon is a double edge sword?
    yes

    will i still be selling on amazon in the near future?
    yes

    do i agree with everything amazon do?
    no

    is amazon part of my long term future plans?
    yes

    do i want to move away from amazon over long term
    yes

    is it easy or hard to move away from them?
    hard

    would i recommend amazon to a fellow shopper?
    yes

    would i recommend amazon to a fellow seller?
    yes

    Summary: they are like a big octopus pulling me in but I get great results off their waves although I know it can be tricky if they pull me in too deep water.

    • Derek Duval
      2 years ago

      Am i working-myself to an early grave for less profits

      Ans
      Yes

      Advice
      stick to Ebay

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