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Friday 19 July 2019

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Prime Day ‘demonstrates Amazon dominance'

Written by Peter Walker
16/07/18

Ahead of today’s Amazon Prime Day, research has revealed Amazon is the preferred starting point for shopping (51 per cent) and is where consumers complete the majority of their online purchases (55 per cent).

Over 3,500 consumers who shop online across the US and UK were surveyed by e-commerce consultancy Salmon, finding that Amazon captures a significant share of online spending – 35 per cent in the UK and 52 per cent in the US. While 72 per cent of consumers are more likely to shop with retailers that are digitally innovative - up from 60 per cent in 2017 - many are still failing to meet these expectations.

Shoppers who did not start their journey on Amazon or Google are more likely to shop on eBay (11 per cent), a retailer’s website (seven per cent), the brand’s own website (six per cent) or social media sites (three per cent).

Amazon’s delivery services - Prime and Prime Now - have also had an impact on delivery expectations, with 22 per cent of consumers now expecting same-day delivery and 43 per cent expecting delivery within 24 hours.

Hugh Fletcher, global head of innovation at Salmon, said that while Amazon’s dominance of the online retail market is no secret, few could have predicted how it has become not only the starting point in the online shopping journey, but also the predominant channel for product purchase.

The research also showed that use of voice assistants like Amazon Echo and Google Home continues to grow, with 40 per cent of consumers currently using or having used this capability. Salmon stated that brands must be prepared to capitalize on this new shopping channel, as 55 per cent of consumers are open to purchasing through voice-activated devices, although 89 per cent said they would like to see the product on a screen before a voice assistant orders it.

Now in its fourth year, Prime Day 2018 will extend to Amazon’s physical stores, with shoppers able to access sales in Amazon Books locations and Whole Foods stores.

Terry Hunter, UK managing director at Astound Commerce, commented that this highlights just how far the company’s reach has extended within the retail sector.

“With Amazon Go, the internet giant launched the world’s first checkout-less store, integrating digital into bricks-and-mortar in a way which has transformed the retail industry mind-set around what the future shopping experience should look like.

“The evolution of the shopper ‘experience’ and their changing expectations, is driving change in the retail industry,” said Hunter, adding: “Events like Amazon Prime Day allow the technology company to harness more customer data, enabling it to drill deeper into consumer trends and behaviours.

Chris Haines, director of consulting at Amplience, suggested that the company is on a mission to put an Amazon sales assistant in every home.

“The company’s ambition is to control every part of the shopper journey, from inspiration to product search and purchase, and with as few intermediaries as possible,” he explained. “If they have to take a loss to do it then they are more than happy to – what they lose on Alexa, they gain from customers tied to the Amazon marketplace.”

Haines continued that Prime Day also demonstrates why brands have been going about seasonal sales all wrong. “When a retailer holds a sale every quarter, they stop feeling special - customers switch off or may even hold out, hopeful that the next sale will bring even deeper discounts - yet Amazon successfully markets Prime Day not as a sale, but as an event.”

Jat Sahi, digital lead for retail at Fujitsu, said the Salmon research underlines how much consumer expectations have shifted as a result of digital disruption in retail.

“The way forward is highlighted by the growing consumer appetite for a technologically augmented shopping experience,” he stated, giving the example of connecting the consumer journey across mobile, desktop and in-store to make shopping more seamless.



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