Site   Web

July 15, 2016

Amazon’s Dominance is Bad for Your Business

“…Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle.”

Jeff Bezos, CEO of Amazon.com

This quote should speak volumes toward the type of businessman that Jeff Bezos is; in a word, he is ruthless. Bezos even once thought to call his organization Relentless.com before naming his online store after the world’s largest river by volume. In fact, the relentless.com URL still directs people to the Amazon website to this day. And make no mistake, when it comes to e-retail, Amazon is absolutely relentless. Even the ubiquitous Google can’t keep pace with this globally recognized entity.

In a late 2015 study conducted by Survata on behalf of BloomReach, 44 percent of the 2,000 U.S. consumers surveyed stated that their product search starts at Amazon.com, which landed at No. 1 on the 2015 Internet Retailer Top 500 Guide. Compare that to the 34 percent who visit search engines like Google, Yahoo, or Bing, and a mere 21 percent who head to retailer websites.

A more recent, albeit less comprehensive, study from PowerReviews found similar results. Among the 1,000 consumers surveyed, 38 percent commenced their search with Amazon, while 35 percent began with Google. The number of individuals who launched with brand websites remained consistent at 21 percent and another six percent reported their product search kicking off on other eCommerce platforms. Of the 35 percent who did start their search with Google, 41 percent ended up clicking on an Amazon link anyway.

While the PowerReviews study did not account for other search engines like Bing and Yahoo and sampled an audience half the size of the BloomReach findings, the results paint a very similar picture; one where Amazon is coming out ahead of all else.

A big part of the reason that Amazon is trumping even the most visited website in the world in product search is because of its mobile experience.

“This has a correlation with the rise of mobile because Amazon has done a very good job with search and discovery on mobile,” BloomReach marketing chief Joelle Kaufman said. “They are capturing the lion’s share of mobile revenue. Consumers said they start on a cellphone and they use it as a research tool. But 81 percent want to buy on that laptop/desktop.”

“Amazon dominates mobile shopping with their app, and that’s a natural place for many shoppers on smartphones to start,” she added.

This dominance of product search is not going unnoticed by retailers and marketers. BloomReach also surveyed 500 digital retail marketers; 44 percent stated that they consider Amazon to be their greatest threat. Compare that to only 20 percent who believe another competitor to be their biggest menace.

Aside from the convenience of Amazon’s mobile app, there is another massive factor as to why the eCommerce titan is dominating product search; personalization.

In the Survata contracted BloomReach study, an overwhelming 75 percent of the 2,000 respondents stated that Amazon is the best at personalizing their shopping experience. Moreover, two-thirds are bewildered as to why more retail sites don’t offer the same level of personalized experiences.

So does this information spell the end for small retail businesses online? Will this domination lead to mass shutdowns in the same way that Wal-Mart caused many physical mom and pop stores to close?

What this Means and How to Combat it

I’m not going to beat around the bush here; this isn’t good news. Amazon’s control over product search has likely already forced many to close their digital doors. And if this trend continues, things won’t get any better. So what are your options? Start selling on Amazon? That’s not all that great of a prospect considering that the consumers who buy your products there never were, and never will be, your customers.

Consider this: 47 percent of consumers surveyed in the BloomReach study stated that the predominant purpose for Smartphones was to research products. Half of those people claimed that they used their mobile device specifically for “showrooming,” or in this case, what is more aptly called “webrooming.” Additionally, we know that people are now spending more time in-app than on mobile Web browsers. This means that the time is ripe to get into the app game. But remember that if you are going to build an app, focus on personalization. Eighty-seven percent of the BloomReach respondents stated that personalization is a key factor in whether they will spend more, and shop more, with a retailer or not.

Building an app is not your only course of action to survive. Social media is one of the most powerful marketing tools on the Web. And Facebook, the biggest of them all, has implemented a slew of sales features to help e-retailers pad their bottom line.

Of course, there is still content. Content is one of the biggest driving forces behind consumer education and online purchases. Content helps businesses convert in massive ways, so it is vital to focus on generating compelling copy to convince consumers to not only shop with you, but to remember you.

Kaufman agreed on this point: “[Retailers] have to think about how they are ensuring that their content is unique to their brand and very well-structured for organic discovery.”

While this may be disheartening news, the battle is far from over. There are still a plethora of avenues to make sales through, and portals to gain consumer attention. Despite Amazon’s utter dominance in the U.S. e-retail market, you can still grow your business, and become highly successful along the way. Just remember the importance of content, social media, and a great attitude. If David had submitted to Goliath’s size before the battle had begun, he never would have realized his own strength and capabilities.

What other avenues do you see useful for gaining the edge against Amazon? In lieu of this news, do you think more retailers will bump up their sales efforts on social media?


avatar

Conscious online marketer, web executive, and multi-faceted writer Tina Courtney has been creating and fostering online innovations since 1996. Tina has assisted many clients in maximizing online production and marketing efforts, and is a staff writer for SiteProNews, one of the Web’s foremost webmaster and tech news blogs. She’s produced and marketed innovative content for major players like Disney and JDate, as well as boutique startups galore, with fortes including social media, SEO, influencer marketing, community management, lead generation, and project management. Tina is also a certified Reiki practitioner, herbalist, and accomplished life coach.  Learn more on LinkedIn, Facebook and Google+.

css.php