Narrative: Amazon Dominates E-Commerce
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Amazon to Launch Credit Card for Prime Members – WSJ (Jan 11, 2017)
This is yet another example of Amazon pursuing its flywheel strategy of reducing friction and providing incentives for people to spend more time and money on Amazon. The 5% cash back feature for Amazon purchases will be compelling for many people, since it’s basically free money for things many of them would already buy there, but since it’s a higher percentage than for purchases made elsewhere, it may also shift some buying to Amazon. This is a smart move and I’m curious to see how many people sign up for this (something we will of course have to rely on third parties to tell us).
via Amazon to Launch Credit Card for Prime Members – WSJ
Amazon Prime membership approaching 50% of US households, says Baird – Twitter (Jan 6, 2017)
This report from Baird’s retail analysts cites its own survey on several points around selection and Prime. It estimates that there are 55-60 million Prime households in the US, out of around 125m total households. Some of the biggest expansion categories in selection are apparel, office/industrial, and home/kitchen, where Amazon has historically been weaker. There are tons of other data points in the linked report, which is well worth a read.
via Carl Quintanilla on Twitter
Walmart has acquired a Zappos competitor to boost Jet.com’s shoe business – Recode (Jan 5, 2017)
Walmart has been hard hit by Amazon’s success and dominance of e-commerce, but has lately been taking more proactive steps to fill gaps in its own e-commerce portfolio, using its Jet acquisition to make further buys. Given the sheer number of small- to medium-sized e-commerce plays out there, Walmart can easily snap up these focused providers and roll them up into its broader e-commerce offering, accelerating its efforts to become more competitive with Amazon.
via Walmart has acquired a Zappos competitor to boost Jet.com’s shoe business – Recode
Fulfillment by Amazon Delivered More than 2 Billion Items for Sellers Worldwide in 2016 – Amazon (Jan 4, 2017)
This is one of those Amazon press releases with very few real numbers and lots of relative ones, but those numbers are still impressive. Fulfillment by Amazon (FBA) is about half of third party seller units on Amazon, which in turn are about half of total unit shipments, so Amazon likely sold around 8 billion total units in 2016. Growth rates for FBA and seller units are higher than overall growth rates, because both are growing as a percentage of total sales, but this still suggests very high growth for Amazon overall in Q4. We’ll know more in a few weeks, of course, when Amazon reports earnings.
via Amazon – Press Room – Press Release
Amazon plans to sell its own line of workout clothes – Recode (Jan 4, 2017)
Taken together with the news that Amazon is one of the potential bidders for American Apparel, this is yet more evidence that it’s very serious about the clothing space. Activewear is one of those categories where some people definitely care about brands and are willing to pay for them, but others just want functional clothing at a decent price, and Amazon could do very well among the latter segment. The rise of activewear at stores like Gap and sister company Old Navy over the last several years is a great illustration of this opportunity, and Amazon is smart to try to tap into it.
via Amazon plans to sell its own line of workout clothes – Recode
Flipkart salaries: Documents reveal high pay of employees at bleeding Indian startup — Quartz (Jan 4, 2017)
In case you’re not familiar with it, Flipkart is the big homegrown competitor to Amazon in India, where the two companies are going head to head in an aggressive fashion, paying (according to this article) high salaries, but more broadly losing lots of money in the process. Amazon, of course, has deep pockets filled by its businesses elsewhere and more recently by AWS, whereas the Indian business makes up most of Flipkart, so if this becomes a game of chicken, Amazon may well come out on top.
via Flipkart salaries: Documents reveal high pay of employees at bleeding Indian startup — Quartz
Amazon India is letting users sell their old products – Mashable (Jan 2, 2017)
This is an interesting new angle from Amazon as it tries to compete with homegrown competitor Flipkart in India. It’s a good example of Amazon’s flexibility in responding to local conditions in markets outside the US – unlike some other big tech companies, it’s not rigid about a particular business model, and instead experiments as necessary to find the right products and strategies to make each market work. It’s still an uphill battle, however, in many of these markets, notably China, while it does seem to be making progress in India.
via Amazon India is letting users sell their old products – Mashable
Amazon beat competitors in a new way this holiday season: Money spent on TV ads – Recode (Dec 29, 2016)
Most of the big online companies have eschewed traditional advertising in the past, and yet that’ starting to change – Google now spends money promoting its hardware, among other things. And Amazon is now spending increasing amounts – and more than Walmart or Target – during the holiday period. That can be read as a sign of confidence, but more likely it’s a sign that Amazon feels the need to reach out to new users (the 17%) to drive growth, which in turn may be a sign of a user base reaching saturation point.
via Amazon beat competitors in a new way this holiday season: Money spent on TV ads – Recode
Amazon patent reveals its drone-deploying flying warehouse plan (Dec 29, 2016)
With the usual caveat about not assuming a patent filing implies immediate (or even any) intention to build something, this is another fascinating step in the evolution of Amazon’s logistics operation. Logistics are vital to Amazon’s ability to do what it does, and a small competitive edge driven by innovation pays off in big ways. Definitely looks like a better use for a barge than Google’s ill-fated Glass showroom.
via Amazon patent reveals its drone-deploying flying warehouse plan
Not Everyone Wants to Shop on Amazon – WSJ (Dec 29, 2016)
Though the thrust of this piece is that there are lots of people who don’t shop on Amazon, for a host of interesting reasons, the flip side is that 83% of shoppers do use the site at least annually, while over half use it at least monthly. That’s an amazing reach for a single retailer, and Prime of course is intended to drive people from occasional to regular use. That 17% holdout rate is down from the high 20s just five years ago.
via Not Everyone Wants to Shop on Amazon – WSJ