WASHINGTON, DC — July 17, 2017. The latest research by digital commerce consultancy firm, Salmon, has revealed that as much as two-fifths (37%) of the total online spend is now made through Amazon, rising even higher amongst those in the US (57%).
According to the report, these figures are skewed heavily by the large number of Dutch shoppers (58%) who say that they don’t spend any money with Amazon, representative perhaps of a retail offering that is limited solely to books in their home country.
Regardless of regional variations, the overall message is clear: Amazon is fast approaching a position in which it could control as much of half of online consumer spending in the West – and all this is before its grocery offering, recently boosted by the acquisition of Whole Foods, has truly matured.
Primed for success
Almost a quarter of a century since it first launched in the US, the continued growth of Amazon’s brand is such that it finds itself nipping at the heels of Apple and Google for the crown of ‘world’s most valuable company’.
This imposing presence, while undoubtedly aided by the company’s continued expansion into new markets and product lines, is ultimately underpinned by a fervent customer base that funnels a significant amount of its spending through this Seattle-based e-commerce giant.
The factors behind this unparalleled dominance, according to Salmon study respondents at least, can primarily be linked back to Amazon’s focus on creating an ecosystem around
its offering. While issues like price and quality also have a role to play, Amazon’s success is being driven by much more than just its ability to compete on ‘pure’ retail terms alone.
Amazon Prime is a key differentiator here. More than half (53%) of those surveyed said that they are more likely to buy from a service like Prime than they are direct from a retailer’s online site. US respondents push ahead again, with nigh on three-quarters (74%) acknowledging that to be the case.
This preference for Prime is such that it seems to prompt shoppers to demand more from digital commerce in general: almost two-thirds (60%) feel that all etailers should be able to match Amazon’s same-day delivery service.
One of the company’s associated offerings – the Amazon Dash Button – is enjoying a similar surge in popularity. 25% of consumers say that they are currently making use of the automated ordering service, with a third (30%) stating that they expect to do so within the next two years or sooner. Dash is particularly appealing to the younger audience, too: more than three-quarters (76%) of 25-34 year olds are already using it or intend to do so within 24 months.
With Dash Buttons already breaking down the traditional interactions between retailers and shoppers, consumers are increasingly eager to explore other ways of Zero UI buying, too. Around two-fifths (41%) say that they would “love to be able to shop using voice activation devices like the Amazon Echo”, despite the fact that only half of these (22%) attest to actually owning one at present.
Combined, Prime, Dash and Echo help to establish Amazon as the de facto name for the majority of consumers when they think about ecommerce innovation. More than half of British and Belgian respondents (57%) say that they believe Amazon to be leading the way in digital retailing, rising as high as three-quarters (72%) amongst American respondents.
An ecosystem of innovation
This strong association between Amazon and innovation is not without consequence for other retailers, either: 60% of respondents confess to being “more likely” to shop with a digitally innovative retailer. With a large number of those digital commerce consultancy firm, Salmon, surveyed (73%) noting that they only plan to spend more online in the future, opportunity is clearly abundant – but only for those etailers that can demonstrate their ability to out-innovate the opposition.
For consumers, “out-innovating” increasingly means providing them with simpler, faster ways to purchase and receive goods. Fewer and fewer shoppers are wedded to the idea that digital commerce necessitates a webpage, or even a screen. If the function performs, after all, then the form becomes irrelevant.
Amazon’s decision to build an ecosystem of devices and services to cater to this changing perception and rising demand has helped it gain an early and substantial foothold. For online retailers across the world, the challenge now lies in how to carve out their own.
