Today. we’ve got an update on Amazon holiday sales, news and what plans are ahead in the New Year for the e-commerce giant.
According to Prosper Insights & Analytics, 26.2% of consumers have bought products during the holidays from Amazon, up 10% from last year. Walmart ranks second at 14.3%. InternetRetailer.com estimates Amazon’s Black Friday weekend sales at $4.74 billion, a stunning 37% of all US online sales. Amazon sent more than 1,691 email campaigns, up 56% from last year and is seeing strong sales as a result.
Two days ago, Amazon delivered its first drone delivery in the UK backed up by a highly-robotized fulfillment center. Amazon Prime Video is now available in more than 200 countries and could threaten Netflix. Bricks and mortar stores appear to be Amazon’s strategy to grow its Amazon Prime service even further. According to analysts, Amazon Go will put pressure on other retailers to quickly improve their own automation technology. With private label brands in more than a dozen categories, Amazon already dominates two – batteries and speakers. 94% of all batteries sold online were sold through Amazon and its partners. 1010data says Amazon and its third-party sellers sold 89% of all speakers sold online.
A new Amazon shipping app in development, matches truck drivers with shippers and could disrupt the $800 billion trucking industry. Amazon’s secret “Consume the City” strategy aims to replace the company’s FedEx and UPS deliveries with its own shipping and logistics services. A new Institute for Local Self Reliance study paints a negative picture of the impact of Amazon on labor and local communities – shades of “Walmartization” concerns from two decades ago.
Amazon Is Shoppers’ Top Destination for Holiday Gifts, Increasing Lead Over Walmart
With the holiday shopping season entering the home stretch, it seems that Amazon.com will be the Grinch who stole Christmas from competing retailers this year. According to the Prosper Insights & Analytics December survey of nearly 7,000 U.S. adults, more than one in four holiday shoppers (26.2%) indicate they have purchased most of their gifts from the online giant this year, increasing 10% from last year.* Walmart ranks second place with holiday shoppers this year at 14.5%, lagging Jeff Bezos & Co. by almost 50%. Target, Kohl’s, Macy’s, Best Buy, JC Penney, Toys R Us, eBay.com, and Costco follow, respectively, with single digit percentage shares. [*Results are tallied from an unaided, write-in question posed to consumers. Figures include digital as well as brick and mortar locations, where applicable.]
This is the third consecutive holiday season that Amazon has held the gifting champion title among shoppers over Walmart. With the big discounter’s share slipping since peaking in December 2013, Walmart has realized a 3-year compound annual growth rate (CAGR) of -13.9% to Amazon’s +15.2%. Consequently, Amazon has been steadily increasing the gap between it and Walmart, which is at nearly 12 percentage points this year. A decade ago, during the December 2006 holiday season, Walmart maintained a 15-point lead over Amazon. Certainly, with shopping behaviors evolving and consumers increasingly gravitating online – and specifically, Amazon – it appears that Walmart still hasn’t figured out how to address the Amazon challenge. Via forbes.com
Amazon goes on an email blitz this holiday season
Amazon.com Inc. sent out 56% more email campaigns from Nov. 29-Dec. 10 than it did last year, according to data released today by digital marketing vendor eDataSource, which gathers email marketing data from a panel of about 1.4 million consumers around the globe.
Amazon, No. 1 in the in the Internet Retailer 2016 Top 500 Guide, sent 1,691 email campaigns from Nov. 29 to Dec. 10, up from 1,081 campaigns it sent from the corresponding days last year (Dec. 1 to Dec. 12). Amazon’s campaign volume is nearly four times the 427 campaigns sent by Wal-Mart Stores Inc. (No. 4) during the same period, more than seven times the 225 campaigns sent by Best Buy Co. (No. 12) and almost 11 times the 154 campaigns sent by Macy’s Inc. (No. 6) and Target Corp. (No. 22).
Amazon’s marketing efforts appear to be paying off as the retailer has accounted for 38.6% of holiday spending from Nov. 24-Dec. 3, according to Slice Intelligence data. That’s despite the online retailer being less aggressive in its use of dynamic pricing this holiday season, according to an analysis by price monitoring firm 360pi Corp. Dynamic pricing refers to a retailer changing product prices based on market demands, competitors’ prices, targeted profit margins or other factors. Via internetretailer.com
Amazon Sales Reach New High in 2016 Holiday Shopping Season
Online shopping has been booming thus far in the holiday shopping season. According to Adobe Digital Insights, e-retail sales in the U.S. totaled $9.36 billion from Thanksgiving Day to the Sunday that followed, an increase of over 16% compared to the same period last year. On Cyber Monday, online sales reached an all-time high of $3.39 billion, a 10% increase over the day in 2015 and only slightly higher than e-retail purchases on Black Friday 2016 ($3.34 billion).
Naturally, Amazon, the world’s largest e-retail operation, is a huge beneficiary of the strong online sales push. Amazon doesn’t release sales data, but InternetRetailer.com estimates that $4.74 billion worth of web purchases were made on the site from Thanksgiving through Cyber Monday. That would represent a staggering 37% of all online sales during the five-day period.
As enormous as that figure may seem, it could be an underestimate. A report released this week from the Institute for Local Self-Reliance says that nearly $1 out of every $2 spent online is funneled through Amazon—with purchases made directly through Amazon, or via the site’s many third-party vendors in the Amazon Marketplace. Via time.com
Here’s what we now know about Amazon’s secretive drone delivery program
Jeff Bezos shared a video Wednesday of a successful fulfilment of an Amazon order delivered via drone in the U.K.
It’s clear Amazon fully intends to move forward with drone delivery and will likely continue to collaborate with Trump’s FAA to craft new U.S. drone rules.
The new video revealed a few things we didn’t yet know about Amazon’s drone program, like a highly roboticized drone fulfillment center, as well as more details about the initial customer trials with Amazon Prime Air, Amazon’s drone delivery arm. Via recode.net
Amazon Expands Reach of Global Video Streaming
Amazon.com Inc. is broadening the reach of its video-streaming services around the world as it looks to go head-to-head with streaming juggernaut Netflix Inc.
The e-commerce giant said Wednesday it had expanded its Amazon Prime Video service to more than 200 countries and territories, confirming a Wall Street Journal report from November.
Previously, Amazon Prime Video was only available in the U.S., U.K., Germany, Austria and Japan. Like Netflix, Amazon’s video service won’t be in China, a country whose regulatory environment has proven tough for foreign streaming services. Via wsj.com
Why Amazon is betting big on brick and mortar
Amazon isn’t saying much about its physical retail operations — Retail Dive wasn’t able to get anyone there to expound on them — but we found plenty of expert observers willing to make a few guesses about its ambitions. They say physical stores have become a necessary facet of Amazon’s strategy to nurture and grow its Prime ecosystem, a virtual retail cyclone that includes not just a massive assortment of goods (including a growing number of private-label products in many categories) and multimedia services, but also an expanding series of devices and technologies designed to make shopping at Amazon even more friction-free and accessible.
“To be honest, we are all very curious,” Andres Mendoza Pena, a partner in global management consulting firm A.T. Kearney’s retail practice, told Retail Dive. “I would bet they could be leveraging the opportunities to interact directly with consumers to either feature or improve their offerings or learn about consumers. It’s hard to pinpoint just one objective. But the more that they are now starting to become a consumer goods company, the more relevant it is to have a direct relationship and interactions with consumers.” Via retaildive.com
Amazon’s grab-and-go stores to pressure grocers to step-up ‘smart store’ efforts
Amazon Go’s new smart convenience store format designed to eliminate checkout lines is catching the attention of big supermarket chains and could pressure them to redouble in-store innovation efforts.
“I think it’s definitely going to make other retailers stand up and take notice,” said Patricia Orsini, an analyst at eMarketer. “It’s addressing a lot of the pain points that people have in terms of shopping — the amount of time spent and standing in line and that sort of thing.”
Kroger and Wal-Mart Stores, the nation’s two largest supermarket operators, have been devoting more resources in the past few years to e-commerce and digital initiatives. However, analysts say Amazon’s new store format appears to raise the bar in terms of automated technology by offering a grab-and-go solution that could some day be scaled to larger supermarkets. Via cnbc.com
Amazon’s Private-Label Brand Is Gobbling Up Market Share
Amazon features private-label products for more than a dozen categories, including batteries and car speakers. Using consumer spending data representing millions of consumers, the research firm analyzed sales trends from September 2015 to August 2016 for these two categories.
According to 1010data, estimated online battery sales were approximately $113 million this past year, and 94 percent of all batteries sold online are sold through Amazon sites. Among the top 10 battery brands, the private-label AmazonBasics brand accounts for about one-third of battery sales online, which is up 93 percent from the prior-year period.
The online speaker market, meanwhile, generated an estimated $1 billion in sales this past year. The Amazon Echo is the most popular speaker sold online, said 1010data, which also noted that Amazon and its third-party sellers command 89 percent of total online speaker sales. The Echo brand reportedly holds a 45 percent market share among the top 10 brands sold on the Internet-based on dollars sold. Sales of the Echo have grown 67 percent year over year, said 1010data. Via twice.com
Amazon is building an ‘Uber for trucking’ app
Amazon is building an app that matches truck drivers with shippers, a new service that would deepen its presence in the $800 billion trucking industry, a person with direct knowledge of the matter told Business Insider.
The app, scheduled to launch in summer 2017, is designed to make it easier for truck drivers to find shippers that need goods moved, much like the way Uber connects drivers with riders. It would also eliminate the need for a third-party broker, which typically charges a commission of about 15% for doing the middleman work.
The app will offer real-time pricing and driving directions, as well as personalized features such as truck stop recommendations and a suggested “tour” of loads to pick up and drop off. It could also have tracking and payment options in order to speed up the entire shipping process. Via businessinsider.com
Amazon’s ‘Consume the City’ secret plan to replace FedEx and UPS
Amazon has been quietly beefing up its own shipping logistics network lately. Although Amazon publicly says it’s meant to complement existing delivery partners like FedEx and UPS, a new report by The Wall Street Journal’s Greg Bensinger and Laura Stevens says Amazon has broader ambitions.
Eventually, Amazon aims to build a full-scale shipping and logistics network that will not only ship products ordered from Amazon, but also will ship products for other retailers and consumers.
In other words, Amazon is looking to compete against delivery services like FedEx and UPS, the report says. Internally, some Amazon execs call the plan “Consume the City.” Via businessinsider.com
What Happens to a Town When Amazon Moves In?
A few years ago, the greatest menace to the mom-and-pop shop was the Big Box store—“Walmartization”—cannibalizing Main Street’s small businesses and pauperizing workers. But the Big Box has lately started to crumple under a blast of digital trade winds, and the Amazon Empire could prove far more disruptive to labor and communities.
According to a study of Amazon’s community impact by the Institute for Local Self Reliance (ILSR) the mega-retailer has transformed shopping into an increasingly dehumanized process, while consolidating the labor infrastructure into a giant network of low-wage logistical chains where workers’ economic security shrinks and community-based businesses wither.
Currently the scale of Amazon’s global operations, which also include shipping and manufacturing, are outpacing Walmart’s. Amazon captures half of each dollar of US online purchases, according to ILSR’s analysis, and then there’s the virtually limitless scope of the company’s market power, hawking everything from books to blush to blenders. Amazon profits from each stage of the sales and logistics chain, from the web-browsing algorithms foisted on us to its behemoth network of “order fulfillment” warehouses. Via thenation.com
Amazon’s worldwide domination
It’s looking more and more like the world is Amazon’s to dominate in whatever category it chooses from e-commerce, cloud technologies and key private label product categories to shipping and logistics, streaming video services and even retail in the future. Stay with us as we regularly update Amazon’s newest business strategies. Enjoy your weekend!