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The Amazon (Ecommerce) Jungle

In September of 2012, the New York Times reported on how Amazon was pulling away from Google to become the most dominate ecommerce platform online.  They noted:

In 2009, nearly a quarter of shoppers started research for an online purchase on a search engine like Google and 18 percent started on Amazon, according to a Forrester Research study. By last year, almost a third started on Amazon and just 13 percent on a search engine. Product searches on Amazon have grown 73 percent over the last year while searches on Google Shopping have been flat, according to comScore.

Now fast-forward to 2016.  Fortune reports how Amazon is now pulling away from all other major online retailers, including Walmart and Macy’s:

Data released by eMarketer on Wednesday to Fortune, show Amazon’s e-commerce revenue rose 15.8% in the last 12 months to $82.7 billion. That is roughly the same clip as at Walmart (which reports results next week) which hit $12.5 billion. But because Amazon’s growth is from a much larger base, the chasm in dollars keeps widening.

As we begin 2017, Amazon has a clear advantage and seems to be pulling away.  In fact, they’re so dominate in the ecommerce space it seems possible they could be headed towards an anti-trust suit.

So where does that leave the small business ecommerce store operating independently on a platform like Bigcommerce, Shopify, or Woocommerce?

Retailers vs Shoppers

There is an interesting dynamic when it comes to the differences between Google Shopping and Amazon.

Retailers tend to prefer Google because it directs shoppers to their ecommerce website, where they have control of the branding, content, and sales funnel.  Retailers get metrics on user behavior via Google Analytics in detail that Amazon doesn’t provide.  While advertisers pay to have products on Google Shopping on their Adwords platforms, they don’t pay a percentage of their sales revenue to Google.

Shoppers love Amazon because it’s a single, secure platform that provides a great user experience.  Amazon goes to great lengths to build their platform around what shoppers want, and it shows.

This is perhaps most important in the checkout process.  With Amazon, you can shop for a huge array of products, then check-out on a single, secure platform.  With Google and all the individual ecommerce websites, you have to trust each store and fill-out payment information separately.  This single difference in process is probably the main factor that’s allowing Amazon to dominate to such a degree.

If you’re going to shop online, do you want to have to go to four different niche sites, fill-out payment info, check return/shipping policies, and find customer reviews?  Or would you prefer to do it all on one cart, using the most secure ecommerce platform online?

Retailers absolutely want your payment and contact info.  They want to know how you react to their sales content.  They want to keep their profit margins.

But shoppers are singing a different tune.  And they are ultimately the ones in control of the purchase decision.

Welcome to the Jungle

The internet is, at its core, a system driven by convenience and speed.  Task-focused shoppers want to find the right products, get the best price, and finish check-out quickly.

In this light, Amazon is the king of the jungle.  When it comes to convenience, speed, and security (all of which translate into buyer trust), smaller, niche ecommerce sites simply cannot compete.

The bottom line?  If you are not on Amazon, you’re losing ecommerce sales.  Because you are not on the most used ecommerce selling platform online.

Develop a Comprehensive Strategy

Amazon’s influence does not mean you should just dump your own branded ecommerce website or ignore Google.  Rather, the best strategy is to use both platforms to maximum advantage.  Here are some tips to consider:

  1. Develop a presence on both Amazon and Google.  Remember that while you may struggle to convert as many sales through Google channels, you can still do a lot to create brand awareness by ranking for more informational-type searches.  Outside of Google shopping, you can develop SEO content to capture your audience in the research phase of the buying cycle.
  2. Use Google search marketing to analyze and develop keyword lists.  Google provides more data as a search engine than Amazon does not, and overall it’s easier to discover keyword themes on Google search.  Apply what you learn to your Amazon listings.
  3. Optimize your Amazon listings.  Many retailers fail at due diligence with their Amazon listings.  Amazon is a product-based search engine with its own ranking criteria – criteria that differs from Google.  Embrace Amazon as a sales funnel and drive as much traffic as you can through it.
  4. To gain more sales from your branded ecommerce template, offer the best deals you can through it.  Use your website as a way to build customer loyalty and retention.  Make special offers for returning customers.  Often, you can get initial sales through Amazon then get recurring sales on your site by offer the best selection and pricing.
  5. Keep Amazon on your website sales funnel.  There is little point in trying to pretend Amazon doesn’t exist, even on your ecommerce website.  Create a link from your site to Amazon for those that simply prefer to shop there.  Note that they’ll pay a bit more for the same products, but freely offer that option.

Online shopping trends change.  Google or another platform may rise to challenge Amazon’s preeminence.  Be prepared to move with those changes as they come.

But in 2017 – and likely beyond – you can either optimize for Amazon sales or lose out by not being present in the biggest online shopping mall in the world.