Millennials now represent the largest generation, having finally overtaken the painfully self-regarding, drug-favoring boomers.
Which means that brands want to attract them, move them and inspire them to higher levels of loyalty. Millennials are, though, supposed to be fickle beings. How can you get them to be committed?
In the week that Amazon finally takes over Whole Foods, CEO Jeff Bezos showed how.
The Whole Foods acquisition by Amazon weeks ago was only the latest milepost in the latter’s inexorable march to the top of retail. The company sold $136 billion worth of products in 2016 – more than any other online retailer (and just over a third of what Wal-Mart did).
And we find that Amazon is big and gaining on Google for product-related searches (be they early or late in the purchase journey). This means that more and more purchase journeys will start on Amazon’s home page, and proceed via search to a variety of product pages all the way to a sale.
This changes a lot of things, but the upshot – to my mind – will be a massive outlay in product content and product-related experiences by manufacturers.
Jeff Domansky's insight:
Interesting angle: the number of product searches on Amazon is growing fast. What does it mean for content and marketing?
Embattled publishers got some good news: Amazon’s launch of a new service selling online subscriptions, including digital magazines and newspapers, gives publishers access to its vast online retail customer base as a potential audience.
The new marketplace, “Subscribe with Amazon,” allows the subscription seller to create a customized detail page with product images, offering digital subscriptions, with the option for tiered pricing schemes where necessary.
The seller can also offer inducements, including free trials or introductory prices. Under the terms offered at launch, subscription sellers receive 70% of the sales revenue for the subscriber’s first year, rising to 85% for each subsequent year.
Jeff Domansky's insight:
Will Amazon help or hurt publishers by selling digital subscriptions? In a small margin industry, losing 30% off the top in addition to discounts or incentives, may be painful.
Amazon's Alexa, the personal assistant that launched with the Amazon Echo smart speaker, completely dominated this year's Consumer Electronics Show. Just ask anyone: "Alexa Just Conquered CES. The World Is Next," read one Wired headline. CNBC, the BBC, MIT Technology Review, and many others all had equally laudatory reports.
Companies like Ford, Huawei, LG, as well as a long parade of startups, all unveiled home appliances, phones, cars, and more gadgets with Alexa integration.
It's a reflection of the sheer power that Amazon is starting to wield in the nascent smart home market, as a growing number of people come to rely on their Echo devices to run their homes and to automate their lives. The market for the Echo is still small compared to smartphones, but it's growing fast....
Jeff Domansky's insight:
Business Insider says no matter how many Google Home devices the search giant sells, Google is playing on a field that's tilted in Amazon's favor.
Looking for the best deals on that hot “it” purse or that tony musk fragrance? Then you might want to skip Amazon.
Department and specialty stores are cheaper than the online giant on a range of full-priced items, the International Council of Shopping Centers claims, based on a study it conducted last year.
A comparison between the same 547 (nonsale) apparel, accessory and beauty products at 124 department and specialty stores across the country, such as Bloomingdale’s, Macy's and Sephora, revealed that on an item-to-item basis, department and specialty stores were up to 30% cheaper than the online juggernaut....
Jeff Domansky's insight:
Some shoppers seem to have forgotten caveat emptor.
It’s easy to have missed some interesting innovations in retail with the past few weeks focused on Black Friday sales. Today, we’ve got a roundup of retail innovators and news to keep you up-to-speed on who’s getting industry and consumer attention.
First, we start with the announcement of Amazon Go – the online leader’s latest retail innovation which lets consumers pick up grocery products at an Amazon convenience store, pay by mobile app with their Amazon account and leave without a check out lineup thanks to innovative technology. Amazon also opens a drive through store concept early in 2017 in addition to new retail bookstores. With 2,000 or more stores on the horizon, that’s the sound of retail competitors shivering and the industry buzz is enormous.
Walmart is building new warehouse distribution centers and investing in new technology in order to keep up with Amazon. Not to be left behind, Target is developing and planning to open hundreds of new smaller-format stores in urban centers and college towns. Toys “R” Us launched a fourth new interactive toy store in Santa Ana, CA with interactive in-store displays including video screens, sound effects and motion-sensor lights.
Nike used the launch of its $720 HyperAdapt high-tech, self-lacing sneakers to generate consumer buzz and store visits. Ace Hardware and online marketplace The Grommet launched a “makers” initiative to sell 20 unique US-made products exclusively in its 160 stores. What’s ahead for retail in 2017? Social is king and influences everything. And of course, Amazon will continue to innovate and be the elephant in the shopping centers....
Jeff Domansky's insight:
Here's a great look at retail innovations and who's innovating and winning new customers online and in retail..
Amazon has been experimenting with the pop-up store concept for a number of years. They have opened up dozens of locations in malls all over the United States. It looks like Amazon intends on opening 30 new locations all over the United States so people can easily buy Kindle e-Readers, Fire Tablets and Echo Speakers for the holidays.
Amazon is on a hiring spree to find temporary and permanent employees, which suggests that the stores could be semi-permanent installations. They are looking for staff in Texas, Washington, New York, Florida and dozens of other States.
Additionally, it looks like Amazon is also looking to hire a major executive to oversee all of the pop-up stores and implement a unified strategy, design and stock each location with more products. Having a dedicated person in charge is a good move if Amazon plans on expanding this program in the coming years....
Jeff Domansky's insight:
Amazon plans to open more than 100 pop-up stores across the US.
In total, 2016 Prime Day was the biggest U.S. sales day ever, surpassing Cyber Monday 2015 by 19%, according to Slice Intelligence, which measures all digital commerce activity and customer loyalty. Slice also found that, on Prime Day, Amazon held 74% of the market share of all U.S. consumer ecommerce.
Sales totals aside, here are some significant takeaways from Prime Day pertaining to Amazon’s customer relationships:
By offering exclusive deals to members, Amazon continued to showcase the value and advantages of Amazon Prime. Membership continues to grow, from an estimated 75 million at the end of 2015 to 85 million now — with projections that it will reach 110 million by the end of 2016.
The deepest discounts seemed to be for Amazon devices such as the Tap, Echo and Kindle Fire. Despite the low cost, the premium devices align consumers even more closely with Amazon and make it easier for them to shop and order – thereby facilitating future purchases with the online retailer.
Prime Day also stimulated customer engagement through the Amazon app. Survey Monkey, which tracks mobile app usage, reported 12 million mobile users on Prime Day, a 50% increase from the 8 million users on an average day. Usage for the week went up 35% in all. Research further showed that 50% of Walmart app users also use the Amazon app — however, very few Amazon app users also use Walmart’s app, demonstrating Amazon’s dominance in the category.
The opportunity to reach new customers outweighed the negative experiences of others. Some glitches were reported, such as problems with checkouts early in the day and complaints on social media that sale prices applied to a limited number of products. But the record number of new subscribers far surpassed the number of shoppers who were dissatisfied with the event. Ultimately, Amazon may view that as a worthwhile trade-off, banking on the recurring revenue from new customers who will spend more time on Prime and increase their lifetime value....
Jeff Domansky's insight:
Good insight into Amazon's e-commerce strategies, dominance and impact on the industry.
Amazon this morning is introducing a new way to read short-form content on Kindle devices and in the Kindle app with the launch of “Singles Classics.”
The service will bring articles, stories and essays from well-known authors and top periodicals – many available in digital format for the first time. The articles will be priced at 99 cents each, with writers and publishers retaining up to 70 percent of the royalties from the sale of every copy.
For those who subscribe to Kindle Unlimited, Singles Classics will be available for free.
As of this morning’s launch, there are over 140 different essays and stories available, including those from writers like Susan Orlean, Norman Mailer, Gloria Steinem, Lawrence Wright,Margo Jefferson, Gay Talese and Chang-rae Lee, as well as authors such as John le Carré and Kurt Vonnegut. Some of the works originally appeared in magazines like Time, Vanity Fair, The New Yorker, Rolling Stone, Esquire, The Atlantic andPlayboy....
Jeff Domansky's insight:
Classic marketing move and great deal for Kindle Unlimited members.
Wal-Mart is offering free shipping with no minimum purchase on all online orders during the week of July 11, its latest move to steal some thunder from Amazon's much-publicized Prime Day shopping event, which takes place July 12.
SWal-Mart will offer the free shipping option alongside 30-day free trials of ShippingPass, a $49-per-year program giving members free two-day shipping on many items. Wal-Mart has seen daily ShippingPass sign-ups more than quadruple in a week compared to the previous week, Internet Retailer reports, although the retailer didn’t disclose how many customers have signed up.In addition to touting its shipping deals, Wal-Mart is holding a sale to rival Prime Day this year, as it did last year.
Stores including Target, Sears and Banana Republic also are offering deals coinciding with Prime Day, notes USA Today.Wal-Mart is aggressively targeting Amazon Prime Day, offering discounts on merchandise from televisions and clothes to furniture this week, Reuters reports.
And while Prime Day deals are available exclusively to Prime subscribers, Wal-Mart is imposing no such restrictions. “We believe saving money every day is better than just one, and that all customers should save, not only some,” Wal-Mart said in a statement....
TVs sold on Amazon.com were 15% less on the Friday after Thanksgiving than they were on Prime Day 2015, Market Track finds.
Amazon.com Inc.’s second annual Prime Day promotion takes place July 12, but if last year is any indication, shoppers might be better off waiting until later in the year for the best deals.
A report from retailer pricing, advertising and promotions tracking firm Market Track finds that on Black Friday 2015, televisions were 15% cheaper compared to Prime Day. Video games, meanwhile, were 12% cheaper on the day after Thanksgiving than Prime Day, which last year was on Wednesday, July 15. Amazon Prime is Amazon’s annual subscription where shoppers pay $99 and receive perks such as free expedited shipping.
Market Track examined the prices of nearly 400 items on both Prime Day and Black Friday 2015 across five categories: TVs, video games, laptops, small appliances and tablets. Of the five categories studied, small appliances had the least difference in pricing, with those items 3% cheaper on Black Friday than on Prime Day.
Overall, all categories studied were cheaper on Black Friday than they were on Prime Day....
Jeff Domansky's insight:
Bargains or busts on Amazon Prime Day deals? Research says not so fast consumers.
A one-star rated product listed on Amazon.com Inc.’s site sells better than a product with no reviews or ratings at all, said Chad Brandon, key account manager of Amazon for athletic footwear manufacturer Asics.
When it comes to new products on an online marketplace, reviews matter more than price, said Fahim Naim, founder of e-commerce consulting firm eShopportunity. Those insights were shared at the “Amazon & Me” workshop this week at the Internet Retailer Conference & Exhibition in Chicago.
Brandon and Nahim both suggested that first-party Amazon sellers, which are manufacturers that sell wholesale to Amazon, utilize Amazon Vine. The Amazon service puts products in front of customers to review. Amazon selects customers based on their reviewer ranks, "which is a reflection of the quality and helpfulness of their reviews as judged by other Amazon customers," according to Amazon. Sellers pay Amazon a fee for the service and can't influence whether the rating is positive or negative. Customers aren't paid to write reviews....
Jeff Domansky's insight:
Low ratings are better than no ratings on Amazon? Somehow I just don't get that. It feels instinctively wrong and my sense is it would be better to work harder to get positive ratings.
It looks as if Amazon is getting into the food business.
A new report from The Wall Street Journal says the online retail giant is gearing up to launch its first brand of foodstuffs by "as soon as the end of the month."
These "private-label brands" will reportedly include Happy Belly (including nuts, tea, and oil), Wickedly Prime (snacks and treats), and Mama Bear (baby products). But they are designed and created by Amazon, with all the profits going straight to the company....
Jeff Domansky's insight:
More disruption ahead by Amazon, this time in the food business.
Netflix and subscription streaming video competitors such as Sling TV, YouTube Red and Hulu are media businesses. Amazon is a platform. Beyond streamed media, it also sells shows and movies on demand, much as Apple does. Its offers subscriptions to services like Showtime, HBO and Sling, which consumers can then watch through Amazon not only on computers and smartphones but also on TVs made “smart” via the inexpensive Amazon Firestick. Amazon offers still more video — everything from exercise and recipe videos to clips from older PBS shows — through its Video Direct program, which lures publishers by offering them a cut of revenue earned from subscriptions, sales or advertising....
Jeff Domansky's insight:
Amazon’s success atop the retail industry has been getting plenty of attention, but in media, the e-commerce giant could hardly be considered dominant. Yet.
Amazon’s $13.7 billion proposed acquisition of Whole Foods rocked the grocery industry last week. We’ve got a wide range of Industry opinion, expert analysis and perspectives on the deal and what it means for the US grocery trade.
CNBC reported that shares of Whole Foods jumped 28% on news of the proposed Amazon acquisition. Cowen and Company reports 12% of US consumers bought groceries online in 2016. CNBC also called Amazon’s plan “a brilliant acquisition” and “a slam dunk.”
The acquisition news had a big impact on retail and grocery stocks, causing a huge drop in share value of tens of billions of dollars. Kroger shares dropped 11% and Walmart was down 5% while Costco and Target each slipped 6%....
Social media influencers – like Instagram stars or YouTube celebs – often promote products they like, either as part of a brand relationship or as means of generating income through affiliate sales. Now, Amazon is looking to get in on this action as well. The company has quietly launched the “Amazon Influencer Program,” which is currently in beta testing as of a couple of days ago.
Similar to the Amazon Affiliate program, the new program will offer influencers commission on products sold, but is not open to the public.
One of the key things that makes the new Influencer program different from Amazon Affiliates is its exclusivity.
Today, anyone can sign up to be an Amazon Affiliate, which lets you build links and shopping ads that you can use on your own website or blog. When a reader clicks through to buy the product, the affiliate receive a commission on those sales, which varies by product type.
Amazon Influencers, meanwhile, must submit an application to be considered for inclusion....
Today, anyone can sign up to be an Amazon Affiliate, which lets you build links and shopping ads that you can use on your own website or blog. When a reader clicks through to buy the product, the affiliate receive a commission on those sales, which varies by product type.
Amazon Influencers, meanwhile, must submit an application to be considered for inclusion.
A year ago this month, Netflix launched in India with much fanfare. The company made a conscious decision to target the rich elite of India and then to broaden from there. As a Netflix spokesperson said at the launch, “Our early adopters are usually consumers who are tech-savvy, who have smartphones and own Apple accounts,” but that the company will later expand “through deeper local insights.”
On the surface, Netflix’s plan made perfect sense. The growth of smartphone, e-commerce and online streaming in the US has slowed, so global internet companies are on the hunt for their next big market. China’s protective policies and regulatory hurdles make it off-limits for most such behemoths. So India it is.
But a year after its launch, Netflix has failed to take over India. As it turned out, home-grown and international competitors alike fought back. The strategies they used revealed the short-sightedness of Netflix’s early-adopter approach....
Jeff Domansky's insight:
Amazon puts the beat to Netflix in the India market – great story.
The e-commerce technology company announced on Monday a new Seattle location, Amazon Go, that has no registers. Instead, shoppers scan into the store with their free Amazon Go app, shop as normal, and leave the store with the items billed to their Amazon.com account.
While some stores have used a wedding-registry technique to allow this kind of shopping, Amazon takes it one step further. Using computer vision — the kind of technology that lets self-driving cars “see” — the store recognizes the user, making it unnecessary to individually scan items.
According to the Seattle Times, the 1,800 square-foot store, featuring ready-to-eat meals and snacks, is open to Amazon employees participating in a testing program. The store will open to the public in early 2017....
Jeff Domansky's insight:
Amazon is now testing three different types of retail – bookstores, pickup/drive-through and now, an innovative no cashier, no checkout, no lineups, convenience store. Retailers look out!
Starting Wednesday, the e-commerce giant is offering deals on a variety of products, including toys, electronics, kitchen and home goods and video games.
However, the company said many of its top deals will be offered during the "Turkey 5," which starts on Thanksgiving Day and runs through the Monday following the holiday -- known as Cyber Monday.
Samsung, LG and Sony TVs and is reducing some prices of Barbie, Hot Wheels and Fisher-Price toys by as much as 50%.
Jeff Domansky's insight:
Ever wanted to see how Amazon packages are assembled and shipped? This CNN news clip shows how robots enable packaging and shipment with less than 60 seconds of human handling. Recommended viewing. 9/10
In the fourth quarter of 2015, Amazon.com Inc. posted a profit of $482 million, more than double its previous highest-earning quarter. In the two quarters since, profits continued to rise, to $513 million in the first quarter and $857 million in the second quarter. In the first six months of 2016, the company’s combined profit was $1.37 billion—no other half in Amazon’s history is in the same universe.
So after years of reporting little to no profit, Amazon is now posting record gains quarter upon quarter. At the same time, its expenses are growing faster—26.4% in the first half of 2016 versus 17.5% in the first half of 2015.
So what’s propelling Amazon into profitability? Let’s look at the numbers.
First, there’s revenue. Amazon’s compound annual growth rate from 2012 to 2015 was 20.5%.....
Jeff Domansky's insight:
Here's a look at why Amazon is 'suddenly" in the money.
The rate of eCommerce growth as steadily outpaced total retail growth by a multiple of three to four times, Amazon.com’s growth has outpaced eCommerce by one to two times, giving it a dominant lead in many of the world’s most mature eCommerce markets. According to Forrester, Amazon drove 60% of total US online sales growth in 2015, capturing $23 billion more in U.S. eCommerce sales in 2015 than the previous year (up from $77 billion in 2014 to $100 billion).
Alex McCord of Compass Marketing, an agency which works with some of the world’s largest CPG brands: “We’re now seeing the advent of what I’ll call e-commerce native companies: companies that come onto Amazon and other e-retailers and who are able to gain traction through getting a ton of recent reviews. They know how to work the Amazon algorithm and then launch products that, from the perspective of a brand in the brick-and-mortar world, have as low as zero market share. But in the world of unbranded search on Amazon and other retailers, they’re enormous players.”
So who is winning on Amazon?
Profitero analyzed our Amazon FastMovers reports between January-May 2016 to rank the best-selling products at Amazon in several key categories. We then identified the number of products that featured in the top 100 best sellers by brand to determine best-selling brands by category....
Jeff Domansky's insight:
Fascinating e-commerce research and insight. Product marketers take note.
Tuesday marked the second annual Amazon Prime Day, which provided Amazon's premium members with deep discounts on a number of products.
The deals were available in 10 countries, with featured deals in each region.
While many of the Prime Day sales were for Amazon products — Alexa, the Fire TV stick, and more — there were a few discounts on other products.
The list of the most popular products in each country, as announced by Amazon, was quite a collection of goods. The top-selling item in Japan was a breakfast cereal; in the US, a pressure cooker was the most sought-after purchase.
Jeff Domansky's insight:
This is a fascinating list with some very interesting differences between countries.
Amazon is bringing back "Prime Day," its annual Black Friday-like sales event where hundreds of thousands of special discount offers are made exclusively to its Prime members.
Last year's inaugural Prime Day brought in an additional $400 million in revenue, according to JP Morgan. This year's event is expected to be even bigger in terms of revenue and the number of deals offered, making it by far Amazon's largest single-day sales event in history.
But according to a note published by JP Morgan on Thursday, the implications of Prime Day are much bigger than the single day's additional revenue....
Jeff Domansky's insight:
The one-day sales spike is just one of the many benefits of Amazon's "Prime Day," according to JP Morgan.
A new report answers the questions, how many products does Amazon actually carry, and in which categories. And it shows the incredible impact third-party merchants have on Amazon's selection.
The report from 360pi shows that Amazon alone carried 12,231,203 total products as of May 2016, excluding Books, Media, Wine, and Services - note that product variants were not included in the analysis.
But when products available from marketplace sellers were included, the total number of products increased almost 30X to a total of 353,710,754 products offered by Amazon and its marketplace sellers combined (applying the same exclusions noted above).
The top 5 categories based on the number of products listed on Amazon's U.S. site, including marketplace sellers (again, the same exclusions apply) are....
Jeff Domansky's insight:
Very interesting look at the number of products Amazon carries.
Selling through Amazon is extremely tempting for a simple, logical reason: you don’t have to pay for digital marketing to drive traffic to Amazon. The volume is bigger than any marketer can dream. Before Journelle, I worked at an Amazon subsidiary, Quidsi, and during my tenure, our core strategy pivoted from investing in its stand-alone sites like Diapers.com and Soap.com to rapidly scaling sales on Amazon’s Marketplace, exactly for this reason.
Amazon Marketplace vendors simply need to offer the most competitive price on a product to win the coveted Amazon “Buy Box”. “Buy Box” winners take all of the sales volume without any marketing spend required, making up for margin loss and commission to Amazon. To scale on Amazon, Quidsi capitalized on selection breadth and uniqueness, and created effective and predictive pricing algorithms to beat their competitors. Overnight, day-to-day business became more like trading stocks than traditional online marketing.
At the same time, there are downsides to relying too much on Amazon. First, there’s the risk of having too much of your revenue coming from a platform you don’t control. There’s also the risk that if you offer all your products on Amazon, you’ll cannibalize your own direct sales (and lose those higher margins). Finally, for high-end brands, Amazon’s site does not offer luxury customers a distinctive experience....
Jeff Domansky's insight:
Harvard Business Review shares key questions to help e-commerce companies decide.
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