Amazon’s New Marketplaces to grow in 2016
Amazon and digital retail in general seems to have hit the inflection point where shopper adoption, frequency and purchases grew faster in 2015 than 2014. 40% YoY growth on Cyber Monday was just one example of accelerating growth, in a year where according to the NY Times, Amazon captured 51% of ecommerce growth and 22% of total retail growth (likely beating Walmart in sales added depending on how December was.)
A concern for both brick and mortar and “omnichannel” retailers is that Amazon has done this so well that they have gained share in ecommerce, having captured more growth than any other US retailer. The secret to this growth is Amazon’s shift from being mostly just a first party retailer to being a marketplace, in fact multiple marketplaces, where the host platform (Amazon) leverages the selling efforts and fulfillment of millions of sellers.
2015 saw the addition of a number of new efforts in this area that will continue to add growth to 2016 results.
New Amazon Marketplaces
- Handmade at Amazon (www.amazon.com/handmade), targeted at Etsy’s niche of highly involved craft and home made sellers (Artisans). Handmade at Amazon captured a lot of sellers interested in the traffic and selling power of Amazon with over 200,000 listings of handcrafted items from around the world, with more than 10,000 artisan sellers and growing.
- Amazon Home Services (www.amazon.com/homeservices), competing against Angie’s List and Home Depot/Lowes withupfront pricing from a currated, Amazon’s Happiness Guarantee satisfaction guaranteed list of for local on-demand professional services that can be browsed, purchased and scheduled all online on Amazon. And of course all supported with Amazon’s easy and familiar Ratings and Reviews.
- Amazon Business (www.amazon.com/business), targetign industrial and business supplies (office retailers like Staples and Office Depot, Club Stores like Sam’s and Costco) as well as industrial supplies distributors like Grainger, in total a massive B2B. Amazon Business claims exclusive business pricing tools, the ability for sellers to list their credentials and quantity discounts for qualifying purchases.
- Amazon Exclusives (www.amazon.com/exclusives), to compete agains Kickstarter, Staples Entrepreneur Store and B8ta providing consumers and businesses direct access to innovative new products . Amazon commits to provide added merchandising, account management and promotion support to manufactures who commit to selling exclusively on Amazon or their own websites.
Expanding with new marketplaces is a way Amazon is managing competition and relevance as ecommerce marketplaces mature and segment while at the same time leveraging its platform and scale to win greater share.
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