Posted at 09:19 PM | Permalink | Comments (1) | TrackBack (0)
Starting yesterday (10/15/09) there was some interesting back and forth between Wal-mart and Amazon that I wanted to give Amazon Strategies readers a blow by blow of:
So far that's where we are, I'll keep you updated if anything else happens in this particular battle of the larger war between these behemoths.
How much ground does walmart.com need to make up?
Wal-mart doesn't release figures that tell how big walmart.com, and of course Amazon reveals their revenues as they are public company and online-only. So to get an apples to apples comparison we have to look at a couple of sources.
First, there's the Internet Retailer's top 500 list (08 results). They have Amazon as the top retailer with $20b in sales and Walmart.com as number 13 with $1.7b in sales. Thus this datapoint suggests that Amazon has a 10X lead on Walmart.com.
Second, there are traffic sources like comscore and compete.com that can give us a view of the relative traffic going to each site. If you assume similar metrics like ASP, conversion rate (which Amazon admittedly is probably a good bit higher on, but hold those constant for now). Below is a compete.com traffic analysis for both: (click to expand)
Here you can see based on unique visitors alone, Amazon has a 2X lead over walmart.com. If we add in Amazon's selection advantage and other areas they are currently ahead of the pack on, that 2X traffic lead could be a 4X sales lead. 10X is a little hard to believe.
While that feels like an insurmountable lead, this is Wal-mart we're talking about. They are a $400b+ retailer with buying power that's easily 20X that of anyone else. As a software guy, I'm always reminded of case studies in history when everyone would laugh at Microsoft whenever they were behind (spreadsheets, OS, browser, video game consoles) and then decide to throw their weight into something. Usually they were able to close the gap very quickly and quiet the pundits. In the world of retail, scale matters and nobody has the scale of Wal-mart, so don't count them out of the race just yet.
While we're talking books here, I take this as a signal that Wal-mart has decided it's time to cut deeply into that 4x lead and they are clearly putting their money where there mouth is.
$8 anyone? Anyone? going, going...watching the war in action - what do you think?
I'm looking forward to the new Stephen King book so thought that would be a good one to watch, you can see the prices for each here - do you think that Amazon/Walmart.com will go lower?
Sound off on your thoughts on this interesting first fisticuffs between the two retail giants in comments.
SeekingAlpha Disclosure - I am long Google and Amazon. eBay is a shareholder in ChannelAdvisor where I am CEO.
Posted at 10:21 AM | Permalink | Comments (0) | TrackBack (0)
Amazon announce today a new delivery option called "Local Express Delivery" (ALED) in seven markets. This service gives buyers same day delivery (with a cut off that varies per city). The brilliant part of the program is that Amazon Prime users get the service for $5.99/item. Other customers pay based on a rate card per category that is in the $15-20 range.
Where is this available and how does it work?
Each city has a cut off time detailed below and you can expect your item to come by 8pm the same day:
Amazon also pre-announced that they will turn on Chicago, Indianapolis and Phoenix in the coming months for ALED. (Hey Amazon - what about Raleigh-Durham!?!?)
What does this mean?
Amazon is clearly continuing to innovate with shipping options as their research has shown that fast, affordable shipping is one of the top factors for online consumers. ALED is an interesting step and will be pretty heavily used in the metro areas for the holidays. I think it also makes it yet another no-brainer to use Prime - heck you save $9 right on your first item here basically - and could see Prime subscriptions rise sharply as the metros realize the benefit of this. This is a great service for the holidays as you frequently 'need it now'.
From a third-party seller perspective, I doubt this will have a direct impact as I don't believe this is available to FBA sellers. However, to the extent this drives more Amazon shoppers to Prime, then FBA for 3P's will become increasingly strategic.
SeekingAlpha disclosure - I am long Amazon and Google. I am CEO of ChannelAdvisor where eBay is a minority strategic investor.
Posted at 08:35 AM | Permalink | Comments (2) | TrackBack (0)
Today at shop.org, we announced the availability and will be demoing our new Amazon offering. If you aren't at shop.org we have details on the site and we can certainly schedule a remote demo.
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It's been less than a month since Wal-mart launched their own third-party marketplace to much fan-fare. Today, I was tipped off by a reader that noticed the text: "Are you a merchant? Sell your item on Sears." while shopping on sears.com.
Posted at 09:51 PM | Permalink | Comments (2) | TrackBack (0)
The solution - partner with top/mid/smb retailers that bring some unique product lines to your e-commerce site, but instead of links are integrated at the product level. Their products are on parity with yours, in search results, checkout, etc. The consumer never has to leave your site and in many cases the experience is so fluid they don't realize they are dealing with a third party.
A tour of the new Walmart Marketplace
Amongst the marketplaces, I would say that the WMMP experience has an Amazon feel, but is much more 'closed'. For example, on Amazon, any smal business can say 'I have one of those widgets to sell' and be selling on Amazon in minutes. With today's launch at least, WMMP has a very limited number of 3Ps at launch: eBags.com, CSN Stores and Pro Team.
Today they are running a front page banner highlighting WMMP, but other than that as a consumer, your first WMMP interaction is on item pages. WMMP items are not highlighted in the search engine results pages that I can see. This figure shows an eBags items and you can see a CSN item here and a Pro Team item here. Note: to see a larger version of any of these images, click and a zoomed-in image will pop up.
In the figure above , I've added two red boxes and a big red arrow to highlight the two areas of the item page that indicate this product is sold via WMMP. First, in the upper right you see some text in he grey area that says: "Sold by Walmart Marketplace" and includes a link for more information (more on that in a sec). Below the product image is a more detailed box that has three areas - the seller, the price and the shipping details.
If you click on the 'Learn More' link in the 'Sold By Walmart Marketplace' area, you get this pop-up that gives a high level overview of what the WMMP is all about:
On the item page under the merchant's name, is a link that says: "Retailer Info" - when you click on that, you are taken to a tabbed page with all of the details of the merchant. You can see the eBags page live here, or here's a screen grab:
This is very Amazon-esque. You can see a summary for the seller, detailed ratings, shipping information, Return policies, Customer Service information and an 'About Us' section that is a catch-all for the 3P merchant to add anything not covered on other tabs. For comparison's sake, here's the same page (also for eBags) on Amazon's 3P system:
You can tell these are very similar.
Finally, when a consumer adds an item to checkout there are two more user flows of interest:
1. An interstitial is presented that asks the consumer to verify they are aware the item is not from Walmart:
2. The consumer is shown each product in a different box so they can pick from the different S+H options (Walmart's vs. the 3P):
Those are the highlights of the Walmart Marketplace. The WMMP is a clean, consumer-friendly extension of the Walmart first-party business and should give Walmart.com shoppers all of the usual 3P benefits of added selection, price and
What's not clear at this time is how Walmart will treat some of the more delicate situations that arises in the world of 3P:
We'll keep an eye out and an ear open for these situations and report back here on Amazon Strategies as this fledgling marketplace gets on its legs and has to cross some of these bridges on the path to success.
The WMMP's impact on eBay, Amazon and e-commerce
What does Walmart entering the marketplace segment mean for eBay and Amazon? Even though Walmart is the 800lb gorilla of the offline world, it is a good bit smaller (Internet Retailer reports that in 2008 they were the 14th largest online retailer with $1.7b in sales vs. Amazon at the top with $20b). Thus, while this is a strategic move in Walmart.com's court, it would have to be massively successful to help them catch up to Amazon. Amazon already has millions of 3P's and a system that's churning through 4-6B in GMV/yr.
eBay is probably more exposed to the WMMP because they have a more nascent focus on the high-end and have some early wins with Buy.com, TigerDirect and eCost, but as they work on getting more name-brand retailers on eBay.com, they will be fighting for mind-share with this new player.
Of course, like Amazon, some retailers will be scared to death of partnering with such a giant player as walmart.com so eBay continues to have and advantage in their neutrality that they haven't been able to execute on very well yet. Long-term if they can execute, that could give them an interesting edge and draw out some unique selection (see next section).
We'll keep an eye on the eBay/Amazon impact, but what's more interesting to think about vs. this one situation of a 3P marketplace, is what if we take it a step further and assume this is the first of many new Marketplaces. Imagine a day when Target, Office depot, Staples, Dell, Apple, OfficeMax, Sears, CDW, BestBuy, etc. - maybe the top 100 retailers PLUS twitter, facebook and even Google, Bing/Msft, Y! all have some flavor of a marketplace.
If that plays out like I think it will (only a fraction of those companies need to go that way for this to happen), then selection and product differentiation become king and you will see the larger retailers snapping up via M+A or at least 'exclusives' categories of products they view as exclusive. Also you could see a price war erupt (in what marketplaces charge merchants) as marketplaces attempt to differentiate their merchant-facing opportunities in the fight for thin merchant mindshare and IT resources.
The bottom line is this is a positive for the million or so smaller merchants that utilize 3P channels because they should see more 'channels' out there fighting for their products which will create lots of opportunities for them in the form of lower prices, more paths to consumers and maybe even some M+A.
I'd love to hear your thoughts on the implications of this new marketplace via the comments.
SeekingAlpha Disclosure - I am long Google and Amazon. eBay is an investor in ChannelAdvisor
Posted at 09:34 AM | Permalink | Comments (11) | TrackBack (0)
I've been talking to lots of reporters and Wall St'ers about Amazon lately and one of the things that seems to frustrate them (yet also make them that much more interested) is that Amazon doesn't really say much about their business. The answer to these questions:
Posted at 08:30 AM | Permalink | Comments (3) | TrackBack (0)
There's been lots of excitement today around Target'sannouncement that they will be leaving the Amazon ecommerce platform (they call it Merchants.com internally). From the statement:
"We believe it is in Target's best interest going forward to assume full control over the design and management of Target's e-commerce technology platform, fulfillment and guest services operations," Steve Eastman, president of Target.com.
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