Commentary

35% Of Retailers Increasingly View Amazon As A Threat

Retailers have a lot to think about. Not only can search engines divert traffic to their Web sites, but 36% view Amazon as more of a threat to them this year, compared to last year. When asked about Alibaba or Walmart and Jet.com, the majority -- at 48% and 51%, respectively -- said a threat doesn't apply with these companies, according to a recent study.

SLI Systems analyzed a global sample of 1.5 billion queries to spot trends. The sample was generated by looking at searches from SLI Systems clients every second week spanning from January 2013 to March 19, 2017. The study defines "one word" as a group of letters and/or numbers in a search query separated from other letters/numbers by a space.

One of the more surprising findings suggests that consumers are going back to using one-word searches to find what they need. Three or more words continues to decline and the number of one-word searches continues to increase. 

This makes sense, especially when using a smartphone. More than one search guru from several agencies has told me that Google is favoring "near me" searches on mobile and all it takes is a word or two to provide an exact match. While the study's one-word searches occur on Web sites, algorithms, machine learning and geographic location are playing a much bigger role. 

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Personalizing the customer experience has become the single most important strategy for many online retailers this year, garnering the No. 1 spot for 26% of all those participating in a recent study. 

The No. 2 most important initiative was inventory, logistics and fulfillment at 14%. Mobile followed at No. 3 with 12%, and personalization, advertising and paid search or re-platforming tied at No 4 with 11%. Site search came in at No. 7 with 7%, followed by other at 6%, mobile app at 2%. Security and virtual reality each came in at about 1%.

When it comes to mobile media, consumers prefer sites to apps. In fact, those citing mobile as their top initiative for the quarter did so six times more than those citing mobile apps. The study suggests that it is driven by the consumer demand for an easy shopping experience directly from mobile browsers, rather than downloadable the retailer's apps they may only occasionally use.

Some 30% in the U.S., 24% in the UK, and 38% in New Zealand cited customer experience per location as the top initiative for the first quarter in 2017. In the U.S., Personalization and Inventory, Logistics and Fulfillment were tied for second place with 14% of respondents chose each category.

In the UK, the No. 2 spot went to mobile site at 17%. The No. 3 spot went to Advertising or Paid Search at 16%.

In Australia, where Amazon reportedly plans to open a new marketplace, Advertising or Paid Search came in as the top online retail initiative for the quarter with 27%, per the study.

The findings also suggest that retailers are confident of growth. Some 84% are willing to expand product lines. Many can drop ship from the manufacturer or designer. About 61% plan to add purchasing or some type of new technology, while 56% say they will hire new employees and 40% will add additional Web sites or brands.

 

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