I recently came across an interesting survey commissioned by BloomReach: they found that 44% of online shoppers in the U.S. began their ecommerce product searches on Amazon.com.

Then only 34% of online shoppers use search engines such as Google;
And the remaining 22%of online shoppers go directly to retailers websites

Google ecommerce position at the moment does not looks very strong, because it relies quite a lot on product-related searches for a big chunk of advertising revenue.
We all know that Amazon.com is the 800-pound gorilla in the market and savvy shoppers know that Amazon does not always offer the best prices. That said, Amazon is still pretty much the primary destination for consumer product searches  with an improving position.

A similar survey carried out by Forrester Research in 2012 found that just 30% of online shoppers began their shopping from Amazon.

So what has changed in online shopping behaviour between 2012 and 2015…in just 3 years?

Amazon Prime…

Amazon Prime membership in the UK cost £79 / year and in the U.S. $99.

There are now 44 million Amazon Prime Members across the U.S and growing. To give you some context here, according to the U.S. Bureau of the Census there are 123 million households in the United States.  Meaning that 36 per cent of U.S. households have an Amazon Prime account! That is a pretty significant incentive!

Amazon managed to add 3 million U.S. members to Amazon Prime in Q1 of 2015 i.e. in just 3 months! And has more than doubled between 2012-2015

So what do consumers get from an Amazon Prime membership?

• Free, two-day shipping,
• FREE Same-Day Delivery in eligible zip codes.
• A streaming-video library
• And a handful of other benefits like:
  • Prime Music: unlimited, ad-free access to Prime Playlists
  • Prime Photos: Secure unlimited photo storage in Amazon Cloud Drive.
  • Prime Pantry: Access to Prime Pantry, where members can purchase and ship to addresses in the contiguous U.S. low priced grocery, household, and pet care items for a flat delivery fee of $5.99 for each Prime Pantry box.
  • Amazon Elements: Access to Amazon Elements products, Amazon’s own line of everyday essentials
  • Prime Early Access: Get 30-minute early access to Lightning Flash sales
  • Kindle Owners’ Lending Library: access to members in the U.S.
  • Kindle First: Early access for members in the U.S. to download a new book for free every month from the Kindle First picks.
  • Deals and Discounts, Compliments of Amazon Mom: These include 20% off diapers through Subscribe & Save and 15% off eligible products from your baby registry.
  • Membership Sharing: Two adults living in the same household can create an Amazon Household to share certain Amazon Prime benefits.

Amazon Prime Drives Customer Loyalty for Amazon. Searching other retailers to compare prices is hardly considered because of the psychological impact of being a Prime subscriber. As a result, Google and other retailers are receiving a lower share of traffic.

Amazon Does not share Keyword Traffic Data but Alphabet’s (formerly referred to as Google) Executive Chairman, Eric Schmidt admitted to a European audience that he viewed Amazon as Google’s biggest competitor. Although this might have been most likely a sway tactic to detract EU regulators from issuing  anti-trust regulations to Google – why didn’t he claim Bing, Facebook or Apple to be Google’s biggest competitors?

Google is all about Acquisition for Etailers and Amazon is all about Retention for itself (and not for marketplace retailers)

Amazon does not share email address info of their customers with retailers that sell in their marketplace. Retailers instead have to rely on Amazon’s stellar retention tactics and activity in order to make repeat sales for Amazon. Amazon is a sales machine channel many direct to consumer brands cannot afford to ignore.

Google’s Efforts to Own Ecommerce

Google has been planning its ecommerce marketplace via it Product Listing Ads (PLA) feeds….which has potential but has yet to go LIVE since its announcement in May 2015.

In 2013, Google tried to partner with brick-and-mortar stores to develop Google Express Shopping; a same day and overnight delivery service for local bricks and mortar stores, but the service failed to catch on and the company was forced toshut its two delivery hubs around San Francisco while it revamps the service. This space is likely to be dominated by Uber in the not so distant future.

I’m bullish on Amazon retailing & its marketplace

As Amazon continues to draw new Prime subscribers, online retailers should start exploring ways to make Amazon work for them. I intend to cover a lot more ground on successful retailing within the Amazon ecosystem and intend to do some investing in Amazon based businesses myself. So do watch this space as I will be interviewing more 7 and 8 figure Amazon sellers on the 2X eCommerce Podcast to help you navigate the Amazon jungle!

These are the Bloomreach survey results summarized in this handy infographic:

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Edited and Mastered by: Quarter After Production

 

 
This episode is edited and mastered by Quarter After Productions. “They put a microphone in front of experts who know what they’re talking about.”