Amazon vs. The World

Amazon vs. The World

With news that Best Buy is hot of late, with analysts upbeat about Best Buy being well positioned to compete with Amazon.com Inc. ( AMZN, +0.24% ), with domestic online same-store sales up 23.7%, it's clear how everyone is compared to Amazon these days. 

Amazon is only the 8th biggest Retailer, but with so much growth and celebrity, it's Amazon against the world. 

Amazon's web supremacy is disruptive and with a move to private label brands, Amazon Fresh and Amazon Pantry, according to Profitero, Amazon Prime Pantry has the prices you want (over in the UK): 

Apples and Oranges 

Acquiring Jet for $3.3 billion was smart of Wal-Mart, but the Ecommerce Giant vs. the brick-and-mortar powerhouse is still like comparing apples and oranges.

It would take a lot for Wal-Mart to get anywhere near the brand reputation and retention rates of Amazon's subscription format of Prime,  when for example: 

Amazon beats Google as a starting search destination for Consumers, 38% to 35%. Amazon as a search starting destination, just about doubles all other brand and retailer sites combined!  

The Google of Online Search for Products

The large volume of customer reviews really is an under-rated feature. With that kind of traffic, consumers trust the numbers.

While Jet may fill the gap of its lackluster online sales, Wal-Mart still amounts to a discount franchise of sorts, while Amazon Prime members spend in excess of $1,000 a year.

How does a brick-and-mortar discount franchise compete with the future? Calling Amazon the future may seem over-kill, but some believe Amazon is secretly altering the future

If Jet works out, co-opting more well to-do Millennials on the way up with deeper pockets may be a good strategy for Wal-Mart. Jet brings to the table a dynamic pricing algorithm, which tweaks supply chain, shipping costs, logistics in effect, adjusting prices on the fly, based on variables such as: 

  1. Customer's distance from Jet's distribution center
  2. Number of items in the cart, etc...

Wal-Mart's Niche as a Discount Franchise Can't Compete

Wal-Mart desperately trying to pivot, is a sign of being reactive but it's probably too late. Jet is basically a very expensive 3 year old startup.  

Best case scenario, Jet can leverage abundant Wal-Mart locations to steal some glory from Amazon. But Amazon Prime ensures it's Amazon against the world. 

Amazon's share over the U.S. ecommerce market is greater than Wal-Mart, Macy's, Best Buy, Apple, Home Depot, Target, Costco, Kohl and Nordstrom, combined. 

With Amazon's delivery innovations and entry into new verticals, Walmart appears like a clumsy elephant compared to Amazon's speedy Unicorn status. While Best Buy shows impressive growth, consumer electronics is anything but a sure thing.

Amazon's Winning Ecosystem of Products

 

These are some of the brands winning on Amazon. According to Profitero: 

Amazon Scores Massive Social Proof

The social proof of massive traffic resulting in customer reviews cannot be under-stated. It may very well be that China's Alibaba is Amazon's only true equal in the digital era where mobile shopping is showing faster growth than brick and mortar sales, to put the obvious quite gently.

Wal-Mart can improve in-store customer facing efficiency, that boosted sales in Q2, with earnings of $3.77 billion, up from $3.48 billion a year earlier. But it will never be an Amazon, and there is only one Amazon. 

According to Forrester, Amazon after all, drove in 60% of total US online sales growth in 2015, that's up $23 billion more in U.S. eCommerce sales in 2015 than its previous year (up from $77 billion in 2014 to $100 billion), on and on. 

Does Amazon have more utility for you than Wal-Mart? Would you try Amazon Prime or Amazon Fresh?
KawalPrit (KP) Arora

Social Entrepreneur, Founder @ dreamzNgoalz.com

8 年

When you have a #mindset of an #entrepreneur you will realize that all these "indirect distributors" are in for challenging times(and this activity in "atomic" form to go also with "bits" or "bits" to go also with "atomic" format is a sign too) if they don't change their relationship with their customers,as more and more customer realize they have #opportunity to get better #value for their hard earned money. I am excited to have lot of #brands on-board taking on e-commerce with #OmniCommerce as part of growing #BusinessNetwork ecosystem. Now as for price is concerned #DirectSelling industry leads with same price across the country (as manufacturing cost stays the same for the product bought locally or other part of country),then based on local taxes and shipping charges both of which are based on local country/province/state & shipping carrier and the PROFIT margin (which cover operational & other expenses/investments for the business to grow and innovate), And Jeff B realizes this that all I am doing is selling "bits" which as #Suppliers can now go Direct to customers (via Internet) and form a mutually rewarding relationship and as this community of customers grow other #entrepreneurs will join and offer better value to customer buying experience, he is smart and working on other endeavors like AWS and Blue Origin to keep his business growing by targeting different industries and customers.

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Vishwanath Krishnamoorthy

Founder, Consultant, Managing Director at Chevalier Designs, Qualified & Registered Independent Director

8 年

another good post Michael! Enjoying these posts. On Amazon - they have changed the way they reach to consumers and what they give to them. The consumers are liking the newness amongst all other things. The are surely doing great. The irony is that everyone else is unfortunately busy trying to catch up with them. This will just not happen as Amazon creates new paths and therefore the followers must just have to wait to know what that it to compete. This is why Walmart is unable to retain the attention it got for all the decades and perhaps still deserves. They are into the incremental stuff and it does not help now. The huge size that Amazon has gotten into makes it hard for anyone else as a startup to come even close to it in getting consumer attention and success.. So, it has to be one of the biggies to do something different and think the problem from basics and divert consumer and amazon along their path.. That vision or leadership is missing when you keep seeing comments from the competition alluding to their ability to do better..

Aldrin Alejandria

I help retailers get more from their store architecture. 20+ years crafting impactful retail experiences for corporate brands, SMEs & independent startups | Store Development + Service Design

8 年

Amazon continues to show us how they have created sustainable value with their customer and with such heroic growth does portray a shark top of the food chain-type figure. They also have had 20 years playing the long game at 'future retail' strategies vs. the point solution or 'profit' strategy the rest of 'the world' was engaged in. Though I get a sense the war is being fought at the category and brand level - including Walmart/Jet who may not carry the same retention and loyalty as Amazon but certainly is a peer in price/fulfillment considerations. For the moment, I shop both.

although i think amazon should be applauded for what they have achieved over the years. I feel strongly in support of the hundreds of small businesses that have lost there brand and identity from selling on the platform. I currently am no working with many that have left amazon to Jin royal mail as we have given them there business back

Gary Kazmer

COO & GM of eTail and International at Enzymedica

8 年

Great article. I believe Amazon is a 3Pl and is changing the game as such. Faster delivery, more product and better service. Their marketplace is a race to the bottom for price. Take a look at keepa or camelcamelcamel.com. Track prices over time and buy when they drop. Long gone are the days where localization meant price escalation. $15 in NYC could buy $12 in Philadelphia and $10 in Pittsburgh. As far as Walmart, they need a change as their own online presence was slow to market and buying Jet was good for shareholder approval. Let's see how radical Walmart gets with Marc Lore at the helm.

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