To compete in the ever-changing online retailing business, you have to understand the direction of the 800# gorilla in your market, Amazon. Internet Retailer’s just-released 2018 Amazon Report shows clearly how the e-retailing behemoth is changing itself and the e-commerce industries in which it competes, says the report.
In e-retailing, it’s becoming as much a facilitator for other retailers as a direct competitor to them. Amazon continues to tighten its grip on the industry it created though. With $150 billion in global web sales last year, Amazon again outpaced industry growth rates, accounting for a mind-boggling 42% of all U.S. online retail sales and selling six times as much online than its largest retail competitor, Walmart.
But with its global marketplace, Amazon now facilitates web sales for 2.5 million retailers. 53% of its worldwide retail shipments (in units) flow through its marketplace, and nearly half of its U.S. web sales are marketplace transactions performed for other retailers, says the report.
Despite its dominance in e-retailing, Amazon is less of a pure e-retailer today than it was a year ago. Most of its profits and overall revenue growth come from cloud computing, fulfillment, and other business services it performs for retailers and non-retailers alike. In 2017, Amazon’s online retail business accounted for 61% of its total revenue. In 2014, it was 77%, and that transformation isn’t going to stop. These services are largely invisible to Amazon’s shoppers, but they’re the profit engines that allow Amazon to expand e-retailing services, like same-day delivery, that strengthen its nearly unbreakable bond with web shoppers.
The new 41-page downloadable 2018 Amazon Report provides an in-depth analysis of these two sides of Amazon, including: