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Amazon: A Behemoth Built on Loyalty

Amazon: A Behemoth Built on Loyalty
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Amazon is a dominant player in eCommerce, capturing roughly 38% of all online retail in 2020.1 Walmart, Target, and other retailers are investing heavily to bolster their online business, but they continue to significantly lag Amazon in eCommerce sales. Walmart, although the second largest eCommerce player, represents only 5% of eCommerce sales as of August 2020.2 While Walmart and Target have grown their online business 97% and 195%, respectively, in their latest quarterly report, they are still far from the leaders in the market.3, 4

Amazon has built its business on customer loyalty and, considering the more than 150 million5 Amazon Prime members, that loyalty has created an eCommerce giant. Consumers love the vast selection and customer experience Amazon offers, as well as the free 2-day shipping and ancillary services—such as video streaming—bundled with a Prime membership.

All this consumer value and goodwill translates into sales. On average, consumers make 6.5 Amazon orders a month.7 Once a consumer has paid their $12.99 monthly fee or $119 yearly fee for their Prime membership, they are incentivized to shop only on Amazon to get the most from their membership. This background lays the groundwork for understanding Amazon.

Today, Amazon is more than just a place to order anything. Consumers use it as a platform for product research and as a source of inspiration for their purchases. Among all online consumers, 63% start their online searches on Amazon, with that number rising to 83% when looking at the US alone.7 Even when product research occurs on Google, Amazon typically appears as the first result. And, among consumers making a specific purchase, 74% go straight to Amazon, not just to make the purchase, but also to conduct product research.7

Similarly, more than half (52%) of consumers use Amazon as inspiration for their online purchases. Comparatively, only 6% of consumers report that their purchases are inspired by TV, email, and/or advertisements.7 Furthermore, a recent CPC Strategy survey found that 75% of consumers use Amazon to discover new brands or products.8

Clearly, Amazon has become more than just a sales channel. The importance of branding and content will only grow as more consumers flock to Amazon. To learn more, please download The Amazon Customer Journey. Click here to get your copy of the whitepaper.

Amazon: A Behemoth Built on Loyalty

THE AMAZON CUSTOMER JOURNEY

Amazon: A Behemoth Built on Loyalty

SOURCES CITED

  1. Levy, Adam. (2020, June 10). Amazon Could Still Gain E-Commerce Market Share in 2020. Retrieved from https://www.fool.com/investing/2020/06/10/amazon-still-gain-e-commerce-market-share-in-2020.aspx
  2. Forbes.com. (2020, March 2). How Much In Online Revenue Can Walmart Generate in 2020? Retrieved from https://www.forbes.com/sites/greatspeculations/2020/03/02/how-much-in-online-revenue-can-walmart-generate-in-2020
  3. Hensel, Anna. (2020, August 18). Walmart’s focus shifts to retention as e-commerce sales grow 97%. Retrieved from https://www.modernretail.co/retailers/walmarts-focus-shifts-to-retention-as-e-commerce-sales-grow-97/
  4. Perez, Sarah. (2020, August 19). Target sets sales record in Q2 as same-day services grow 273%. Retrieved from https://techcrunch.com/2020/08/19/target-sets-sales-record-in-q2-as-same-day-services-grow-273/
  5. Amazon.com, Inc. Amazon.com Announces Fourth Quarter Sales up 21% to $87.4 Billion. (2020, January 30). Retrieved from https://press.aboutamazon.com/news-releases/news-release-details/amazoncom-announces-fourth-quarter-sales-21-874-billion?ots=1
  6. Clement, J. (2020, June 19). U.S. most popular reasons for buying via Amazon 2020. Retrieved from https://www.statista.com/statistics/670499/us-amazon-usage-reason/
  7. Fletcher, Hugh. The Future Shopper Report 2020. Retrieved from https://insights.wundermanthompsoncommerce.com/hubfs/@UK/Landing%20Pages/2020/The%20Future%20Shopper%202020/WTC%20-%20The%20Future%20Shopper%20Report%202020.pdf?hsCtaTracking=24d37c38-db5d-4797-bd6c-2ea35127ad21%7C70cdff40-3236-48fb-a2ec-c4b298453df9
  8. cpcstrategy. The 2019 Amazon Consumer Shopping Study: How Shoppers Browse and Buy on Amazon. Retrieved from https://learn.cpcstrategy.com/rs/006-GWW-889/images/2019-Amazon-Shopper-Survey.pdf

WE ARE HERE TO HELP

Compass Marketing can help you discover opportunities for your brand. Our account managers and eCommerce experts use a holistic approach based on data and insights to help guide brands to success. If you would like to learn more, please reach out to info@compassmarketinginc.net! We are always happy to help and would love to learn more about you and your brand.

ABOUT COMPASS MARKETING

We are dedicated to making brands more valuable by combining the very best in insights and experiences with unmatched human interaction. Our team of sales, marketing, and digital experts is dedicated to growing our clients’ market share and building brand equity. We combine art and science—pairing the personal expertise of our team with proprietary technology—to help brands grow quickly and efficiently. As an Amazon Ads partner, we can help brands realize significant growth on one of the world’s largest eCommerce retailers.

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POST TAGS: AMAZON, ECOMMERCE