In 2018, Amazon.com Inc. became the second company to join the 1 trillion dollar market capitalization club when Amazon’s share price crossed the $2050.27 threshold. Considering Amazon’s journey from the Initial Public Offering in 1997 at $18, the growth is incredible. A $1000 worth Amazon purchased during its IPO would be worth over a million.
The point of narrating this bit of history is that eCommerce is somewhat unimaginable without eBay and Amazon. The proliferation of the internet has played a major role in the digital transformation of retail, trade and store transactions. eCommerce statistics confirm the explosive pace of growth in this industry and the story of Amazon is remarkable in many ways.
Here are some interesting facts about the evolution of Amazon:
Fact 1: Amazon started out with selling books
Yes, the original inventory of this eCommerce store was simply limited to books when Jeff Bezos launched Amazon from his house’s garage in 1995. The first book that Amazon sold was "Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought" by Douglas Hofstadter.
Fact 2: Two in 5 customers receive 1-2 packages from Amazon weekly
According to research by Walker Sands, an average of two in five US consumers (41%) receive 1-2 packages from Amazon every week. This number is more significant for the age group of 18-25(50%).
Fact 3: Amazon owns multiple other subsidiaries brands
Apart from its own name-sake brands like Amazon Kindle and Amazon Echo, it owns dozens of other brands and subsidiaries. The names include Zappos, Whole Foods, Goodreads, Audible, Twitch, Kiva, Ring and Souq.com. Souq is an English-Arabic eCommerce platform and one of the largest in the Arab world.
Fact 4: Amazon inspires entrepreneurship
Many of the former Amazon employees later found their own blockbuster businesses. Examples include Jason Kilar the founder of Hulu and Vessel and Charlie Cheever who created Quora.
Fact 5: There are more than 105 million Amazon Prime members in the US alone
Amazon Prime has seen the most growth in the U.S with an estimated 105 million subscribers. As per Statista, Amazon Prime customers paid 1400 US dollars in the last year on an average. The data also shows that non-Prime members spend about 600 U.S. dollars on an average.
Fact 6: Amazon’s fastest order took less than 10 minutes
Amazon’s record-breaking order till date was a four-pack of Starbucks Vanilla Frappuccino to a customer in Miami. The entire delivery took less than 10 minutes.
Fact 7: More than half of Amazon’s marketplace comprises Third-Party Sellers
Nearly 53% of all Amazon sales are from 3rd party sellers on their marketplace. In fact, in the 2nd quarter of 2019, 54% of paid units had been sold by 3rd party sellers. And third party merchants sold goods worth 160 billion dollars in 2018 on the marketplace. This dwarfs eBay’s $95 billion gross merchandise volume significantly.
Fact 8: Amazon hasn’t paid federal taxes since 2017
While Amazon’s profits doubled up from 2017 to 2018, it pays zero federal tax. This is legal because the US government provides certain tax breaks to companies if they spend it on reinvestment and research and development. Amazon used the policy cleverly to build warehouses and data centers around the country.
Fact 9: Amazon has banned Powerpoint presentations at the company
As part of a cultural shift, Amazon has banned powerpoint presentations to promote creative and careful thinking of new ideas. Instead of PowerPoints, the managers are encouraged to present their ideas and pitches in a document that is called a “narrative.”
Google versus Amazon
Part of Amazon’s success is due to the fact that it is one of the world’s largest search engines. Yes, one may easily forget that it is the largest search engine for eCommerce. Did you know that 54 percent of product searches happen directly on Amazon now? If you exclude YouTube which is a part of Google, then Amazon is the world’s second-largest search engine.
In 2018, Amazon overtook Google as the most popular place for product searches online. While millions of users still begin new product searches on Google daily, Amazon is the go-to eCommerce destination. This is why, advertisers are shifting their marketing dollars to Amazon and driving the company’s ad revenues.
A9 Search Engine
In Q1 2019, Amazon’s advertising revenue was nearly $3 billion which is significantly less than Google’s quarterly mark of $30 billion. Yet, it is a remarkable number considering the shifting dynamics.
One of the reasons for Amazon’s incredible product search is the little known A9 search engine. Amazon’s internal search engine powers several purchases by its incredible product recommendations. The search algorithm known as the A9 makes sure that searchers get the best results for their queries.
As a result, Google has to pull up its socks and improve its eCommerce game. In a recent Google Marketing Live keynote, Oliver Heckmann who is Google’s VP of Engineering for Shopping and Travel made two key announcements regarding Google Shopping.
- 1 They are rehauling Google Shopping for a better, bigger experience
- 2. There is an expansion of showcase shopping ads.
In fact, all eCommerce companies and sellers can learn a few things from Amazon’s site navigation and product search simplicity:
- Create interesting listings that people are looking for
- Make the titles very specific and clear
- Highlight your product’s best features with bullet points
- A/B test your images and be creative
- Write killer product descriptions
The future of eCommerce
eCommerce has redefined the concept of “business as usual” and retail as we know it. The future of eCommerce is already here. Businesses have the choice to evolve their strategy or get disrupted by those who are evolving.