Amazon, with another boom in Prime Day-style offerings this week, may appear to be doing everything it can to get you to its store. But, quietly, it’s finding ways to be part of your online shopping elsewhere as well.
Amazon dominated over the 37% of the market e-commerce in the United States last year. After advertising its latest Prime Day sales event in July as its biggest ever (once again), it’s about to deliver a second mine of discounts with its early access Prime Day sale on Tuesdays and Wednesdays.
But if you look around, you might see signs of Amazon reaching your online purchases in new places. In April, Amazon revealed a schedule “Buy with Prime” which allows sellers to add a button to their websites. By clicking on it, customers can access their Prime benefits for a purchase outside of the vast Amazon store, with Amazon handling payment and shipping.
Buying with Prime makes sense in light of another feature announced last year: Local Shopping, which allows third-party sellers to offer curbside pickup from their storefronts on Amazon’s online marketplace. Both of them facilitate transactions which typically don’t involve Amazon at all.
Both are also examples of how Amazon is leveraging its logistics capabilities for other retailers. But taken together, these features also provide access points to Amazon in some of your online transactions where it was previously blocked – another way for the giant retailer to have its tentacles touch your cart when you are someone else’s customer.
Peter Larsen, vice president of Buy with Prime at Amazon, said the company is helping retailers increase sales “Delivering shopping benefits that millions of Prime members love and trust, including fast, free delivery and a seamless checkout experience.”
An Amazon spokesperson added in a statement that the company invests billions a year in building the infrastructure and the services needed to power the businesses of third-party sellers and merchants, regardless of whether they are on Amazon or not.
“For more than 20 years we have been delivering innovative capabilities to boost small business success,” said the spokesperson, “and we continue to look for ways to invent on behalf of and satisfy entrepreneurs and small business owners.”
For now, this week you’re seeing events like the Prime Early Access sale because Amazon and its peers want to make Christmas shopping easier for you earlier this year, according to analysts. What about any off-site purchases during the business frenzy? Amazon would like some of those too.
Amazon comes out from behind the scenes
While you may not have noticed, Amazon has been processing customer payments and delivering packages for some purchases made on other companies’ websites for years. Its Amazon Pay feature and multi-channel fulfillment were both introduced before 2020.
Placing a Buy with Prime button on a retailer’s website amplifies this process. Amazon processes payments and fulfills orders as if the purchase was made on its marketplace.
In addition to Amazon’s fulfillment support, Amazon will also advertise some sellers that they use Shop with Prime on social media platforms, sending customers directly to brands’ websites. Sellers can also use an official badge to advertise Buy with Prime in their marketing.
Amazon will also create some exit ramps from its website for participating sellers – businesses will be able to redirect shoppers from their Amazon Marketplace storefront to their website to use Buy with Prime.
With the in-store pickup option, which Amazon says is still in its infancy, shoppers looking to buy something from a nearby store can now search for it on Amazon without having to browse individual business websites. In addition to targeting more customers from the mega-retailer to local businessesthe feature requires those stores to list their in-store merchandise on Amazon to make shopping easier.
Amazon hasn’t specified how many retailers are using the Buy with Prime button, which is available to sellers by invitation only for now. One brand using the service, Great Circle Machinery, said in an Amazon press release that half of its sales have come from the Buy with Prime feature since it was added.
“It is difficult to gain the trust of buyers to make a purchase on our website”said Patrick Sean Briseno, the company’s e-commerce and marketing manager, noting that the Buy with Prime badge gives credibility.
Brian Yarbrough, financial advisor to Edward Jones, said some buyers they might find it more welcoming to visit a company’s website to learn more before making a purchase, but still want the benefits of a Prime membership.
Prime shopping and in-store pickup are part of a long-standing strategy to expand Amazon. The ecommerce business beyond its website, retail analysts say.
Just as it faces slowing sales growth, Amazon has more logistics and fulfillment infrastructure than it needs, the result of rapid construction to keep up with pandemic demand.
Tools like these are the ways Amazon can use its extra order fulfillment capabilitysaid Neil Saunders, a retail analyst at consulting firm GlobalData.
The options can also appeal to retailers who don’t see the value of selling from an Amazon store but could benefit from Amazon’s other services. “Amazon can say: maybe not everyone wants to be on the market, but we have all these logistics offers and payment offers”Saunders said.
In addition to being engaged in more purchases, Amazon’s features can funnel more data about your shopping habits to the mega-retailer. This way, Amazon has an even clearer picture of what you buy and how you buy it.
Amazon claims not to sell user data and has pointed to a Buy with Prime FAQ stating that the company will not use the non-public information obtained from those purchases to make its own sourcing, inventory level or pricing decisions, the which applies to products from Amazon and those of third-party sellers.
It also says Amazon will not use non-public data from purchases Shop with Prime for merchandising or personalization features on its online marketplace. However, such data has the potential to be “Very precious”Saunders said. Amazon already uses purchase information from its site to recommend other products and place ads in search results, for example.
The company was also accused of breaking its policies for not using third-party vendor data on its market to make competing products with its private label business. Questioned by Congress in 2020, then Amazon CEO Jeff Bezos said he could not guarantee that the policy was never violated.
Amazon’s spread to further corners of the ecommerce industry is likely to attract the attention of federal antitrust regulators, who are already investigating the company’s practices. The company is far from dominating the market for tools that facilitate shopping from a trader’s website, Saunders said. Shopify, Salesforce, and Adobe are among the many companies offering these services.
However, Amazon doesn’t necessarily need to dominate a second industry for these fulfillment features to further increase its market share e-commerce, said Sucharita Kodali, a retail analyst at market research firm Forrester. Additionally, Amazon’s promises not to use the data it collects from these features may not satisfy the government.
“That would be something I would think antitrust regulators disapprove of,” Kodali said. For now, it could mean that you’ll have more and more boxes with that Amazon arrow smirk.
#Amazon #cash #youre #Amazon