Apr 24, 2018 1:52:40 PM
Posted by Nick Chasinov
Full disclosure, I think Amazon is the best retailer, period, but I didn't always feel that way. And I am not just saying that because Teknicks works with them. I honestly have a wonderful experience shopping on Amazon, primarily through the app. That is all it takes to win over consumers; consistently exceptional customer experiences from start to finish. Let me know what you think in the comments.
For many, it is not surprising that Amazon.com has achieved yet another milestone in its journey. Recently, Dealerscope rated the company the #1 Consumer Electronics Retailer. For the first time since the list's creation, a company has ranked higher than Best Buy. This is yet another example of how the company has gone from bookseller to e-commerce giant. What does this mean for the average electronics store? What does this type of intense retail relationship mean for consumer behavior analytics?
Can Anyone Else Compete?
It's important to note that consumer electronics continue to be a strong buying category worldwide. And, other contenders for the title, including Best Buy and Walmart, continue to see growth in their revenues from increased sales. But, what is becoming more clear within the retail industry is that it will be very hard, if not impossible, for competitors to topple Amazon. Simply, they will not be able to keep up, and some analysts believe the online retailer will continue to outpace other industry leaders for years to come.
Tracing the Path of Amazon's Dominance
Amazon launched its first website in 1995. At that time, Jeff Bezos, the founder, and current CEO began the company as an electronic bookseller. But, even in these initial days, long before consumers thought to buy products they wanted online, Bezos had a plan to build the company from books up to dominating in virtually every field possible. He wanted Amazon to be the globe's largest bookstore. And, then, he wanted it to be the "everything" store.
The company – which started out of his garage – was always from the start meant to dominate online retail sales. In the first month of sales, the company sold books across every state and 45 countries. For years after that, the company struggled to keep pace often lacking enough workers to keep up with demand and requiring constant improvement in logistics and warehousing. Still, he added new sectors and new products, one by one.
Then, in 2007, Amazon took one of the most important steps it would take in entering the electronics market. It launched the Kindle. Sold for under $400 in the United States, this e-reader would be very basic by today's standards. However, at that time, the device sold out in five and a half hours. The company would struggle to get stock numbers back up through April of 2008. This entrance into the device market, along with electronics supplies, helped the company to solidify its place as a valuable company. While it was not worth what Microsoft or Apple were at the time, Amazon's name suddenly became known for its electronics products.
The Kindle continued to evolve as well. It did not stay a basic, black-and-white book reader. It moved into a true personal tablet and today continues to be one of the best-selling tablet computers available. Even though other companies would compete with similar devices (think, Barnes and Noble's Nook) Amazon's product would continue to be the cutting edge product available.
The fact that Amazon is now the top seller of consumer electronic products is nothing to be overlooked, as it is an incredible step over Best Buy, which has long held the spot. But, it is also nothing unexpected since Amazon's growth continues to climb. As of March, Amazon is the world's second most valuable company, surpassing Alphabet (Google's Parent Company). Only Apple is larger. And, along with this rise comes Jeff Bezos's wealth. Worth an estimated $105 billion, he is the world's wealthiest man.
Consumer Tech Sales Continue to Climb
Stepping back a moment, it is essential to consider consumer demand for electronics products. No matter the specific industry, consumers love technology. The Top 101 list from Dealerscope found that consumer electronic sales in the United States and Canada are growing. In 2017, the industry was worth over $264 billion, a 14 percent climb over the previous year.
Another interesting note, perhaps a bit contrary to the Amazon growth, is that consumer electronics retailers, including brick and mortar companies, are also growing. Even as other retailers close their doors, the Top 101 found 929 new electronics retailers opened doors in 2017.
Consumer Behavior in the Years Coming
Noting this love of electronics and the growth of Amazon, it is clear that marketers need to focus their attention on both groups to see sales increases. Consumers today are educated, and they are less rushed to make a buying decision. Here are a few key points to keep in mind:
- Consumers still love electronics and advancing technology, faster speeds, and better quality continue to drive sales.
- Consumers crave new products. While smartphone sales are lagging a bit, consumers are focused on new products such as smart home devices and televisions.
- They research. With less of a spontaneous buy, companies must ensure their product is easily found online with detailed information and positive reviews to reach consumers.
Research, SEO, and Marketing in the Amazon Age
Amazon is changing the way companies have to market their products. The need to invest in an omnichannel marketing plan is critical. More so, it is important to market towards Amazon buyers. They want:
- Detailed product descriptions.
- Clear visuals.
- Incredible reviews and real, authentic information about using the product.
- Far less sales marketing – show them it is right for them; don't tell them.
- Easy access to buying like on Amazon so it can be delivered – quickly – right to their door and easily returned.
- Exceptional customer service (Amazon absolutely dominates this)
- SEO geared towards buying a product, but not always necessarily with local focus.
For consumer electronics companies and those that sell them, it is not possible to beat Amazon. Instead, it has become essential to utilize the dominance of this company's market share, and its untouchable customer experience. Sellers can take advantage of Amazon's FBA program (Fulfillment by Amazon) and have Amazon do what they do best; list your products, store your products in Amazon's fulfillment centers, pick, pack, ship, and provide customer service for the products (for a fee of course). Outside of Amazon's ecosystem, this also means creating marketing campaigns around Amazon sales processes and utilizing customer experiences such as review strategies to integrate a seamless sales journey that closely resembles Amazon. It is important to ensure easy access to incredibly useful information, and utilize SEO that is designed to capture the consumer's attention, not just the search engine. Consumers will continue to provide demand for these products, and to reach them, marketers must be able to offer the same services and features Amazon can provide. Let me know your thoughts in the comments.
This post originally appeared on my LinkedIn.
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