Amazon.com is steadily becoming the most prominent player in the retail marketplace. During the past few years, Amazon has gradually diminished the gap itself and eBay, and now even starting to grab the lead. In this race Amazon appears to be the winning horse.
How do we know?
Amazon has been growing at an average of 29% each year, for the past 4 years. That’s a staggering statistic, especially given the fact that the #1 marketplace – eBay – has a significant lower growth rate than Amazon.
In fact, Amazon is growing on average 27% faster than eBay (based on monthly GMV calculation). While eBay is struggling to keep its head above the water in terms of growth rate (Q4 2008, Q1 2009, Q2 2009, Q3 2009), Amazon is maintaining a healthy growth rate of average 28% in the last 12 months (Q3 2008 – Q3 2009). Amazon’s growth is made even more impressive considering the current economic climate.
#1: From Google Insight comparisons, we clearly see how Amazon is closing the gap on eBay’s lead (Q4 2008 is the point where Amazon starts to close the gap).
#2: Here we see a tied battle during the last year. However, in Q4 2009 Amazon actually overtakes eBay when comparing the number of unique visitors to it’s website.
sources: Compete.com, Google insight
So it appears clear that Amazon is growing faster then eBay, and will probably become the online marketplace retail leader by 2012.
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The question remaining is how does amazon compares to the rest: internet, eCommerce and retail? Well, since Q3 2006, Amazon is growing faster then eCommerce itself (which is growing faster then retail sales).
This is quite a stunning conclusion and I feel it bears repeating: TheeCommerce market is growing faster than the retail market… and Amazon is growing faster than the eCommerce market.
Amazon earnings clearly reflect this trend:
Amazon earnings
Why Amazon?
There are 2 main reasons for Amazon fast grow results, as Scot Wingo from channeladvisor indicates:
1. 3rd Party Marketplaces: Amazon strategy is to lean heavily on 3rd party merchants who wants to sell their inventory in the Amazon marketplace. Recently, Amazon was smart enough to let 3rd party merchants sell more on it’s marketplace – a good strategy to avert inventory risks during the economy down turn. Now that the economic climate is improving, Amazon can roll back and return to selling more of its own inventory (33% of amazon sales are 3rd party merchants).
2. Prime Shipping: Amazon’s free shipping strategy has proven to work. Amazon offers free 2-Day shipping on all items that are eligible for amazon prime, and most items are eligible for amazon prime (since most items are amazon items and not 3rd party items).
What Should I Do As A Merchant?
It appears safe to say that by 2012, Amazon’s marketplace will reach the size of eBay’s marketplace. Our best advice is get into the Amazon marketplace as fast as possible, and combine that with the current business strategy of your online retail business.
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If you’re already selling on Amazon, then we advise you to Win the Buy Box - as this is a key element to increasing your Amazon profile and bringing more traffic your way.
Finally, you can always consult our team of eCommerce experts for additional resources.
So we’re all excited about the new look & feel of Google, and the new search experience, but the questions we’re asking are: How this is going to affect online consumers behavior? and How this will affect search engines optimization and paid search campaigns?
We can summarize the changes in one word – refining. Google is sharpening the tool of refining, and will improve upon the search experience with several refine options.
The Main New Features and Their Impact
Refine by category on prominent position- this option is located on the top left side (eye catching position- as the eye scans from left to right). The categories are: News, Images, Video, Books, Maps, Shopping, Blogs and Forums.
Related results-the “see also” tab enables the user to find related content and similar results for his search term. With regard to eCommerce, it can be used as an effective cross selling feature for similar items (even by competitive brands/items!).
Refine by date- search results can now be refined by date, distinguished by the history of the content: recent results, past hour (breaking news), past day, past week, past year and custom range.
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Smart search algorithm- The most interesting feature we’ve found is the search experience itself. When you enter a term to search, Google provides you results for every type of search, based upon what you’re looking for. For example, when entering “Wii games,” Google will present you with results in these categories: News, Blogs and Shopping. But, when entering a more specific term such as “buy Wii games,” the shopping category will be promoted, therefore making the search more relevant.
Shopping Related Search
Overall, when referring to shopping related searches, we notice 3 main category types: Brand search, Product search, Buy Product search.
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Each category type refers to different search: first is the general brand search, second is specific product search (by the same brand), and third is the product search accompanied by the word “buy”.
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The last search type (Buy Product) strongly implies that the searcher is actually a prospective consumer interested in buying this product, as opposed to just educating himself about the product. Google understands this, and thus presents the potential consumer with search results that are explicitly shopping oriented.
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Let’s do a quick test. We will search for a product based upon the 3 categories types:
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1. Nike (brand search)
2. Nike Shox (specific brand item)
3. Buy Nike Shox (buy specific item)
5. time refine-
6. “see also = cross selling ?”
buy wii games2. sopping on the left top side (eye chatcer possition).
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Brand Search – “Nike”
When searching the term “Nike” – which is a generic search – we see that the first category in the refine search is News. Following that are Images, Video, Blog, Etc. It appears that without a specific search, the Google search categories will present the natural 7 structure. When you search “Nike,” you get more relevant news content than you do images.
Brand Only search
- Product search – “Nike Shox”
When searching for “Nike Shox” – which is not a generic search – we see a change in the category order that Google presents us with: the first category in the refine search is Image. Right after that, we see Shopping, which jumped to the #2 position (In the natural 7 structure, it is in the #7 position). So, it appears that when searching for “nike shox,” there is more image related content than there is shopping related content.
Specific Product search
Buy this product search – “Buy Nike Shox”
Searching for “buy nike shox” clearly and directly defines the purpose of the search: shopping. Google’s search algorithm will adjust and reevaluate the search results for relevancy. In this search instance, the Shopping category will be presented as the first result.
Buy Specific Item search
Pretty cool stuff, right? How do you think the new Google homepage will affect eCommerce? I would love to hear your comments and thoughts.
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