Amazon is poised to become America’s single biggest retailer, outpacing Walmart.

November 10, 2019 Phillip Nones Business, Economics, Marketing, Sales Amazon, Consumer Marketing, etail, Online Retail, Packaged Facts, Retail Industry, Walmart

It’s a measure of how much the American retail landscape has changed in the past decade that Amazon is poised to overtake Walmart as the largest U.S. retailed by 2022.

That prediction comes from a recently published report from market research firm Packaged Facts.

As of today, Packaged Facts estimates that Amazon makes up ~43% of all U.S. e-commerce sales, which is dramatically higher than its ~28% share just four years ago. Continuing its growth trajectory, by 2022 Amazon is expected to make up nearly half of all U.S. e-commerce sales.

That degree of concentration will make it bigger than Walmart — even considering the latter’s huge brick-and-mortar presence which Amazon lacks.

Of course, Walmart continues to possess additional advantages that Amazon cannot match, despite the latter’s acquisition of supermarket chain Whole Foods in 2017. Not only does Walmart have a huge physical footprint in retail, it also offers a wide range of in-store services which entice foot traffic — things like an onsite pharmacy, financial services, and photo processing.

Also working in Walmart’s favor is its dominance in so-called “click-and-collect” shopping orders. According to recent surveys, ~43% of respondents identified Walmart as the pickup location for their last click-and-collect order — three times the share percentage of runner-up Target.

Still, the emergence of Amazon atop the retail industry heap says volumes about the seismic shifts brought about by online retail. The channel hasn’t been around all that long in the grand scheme of things, but its impact has been nothing short of seismic.

How have your shopping habits changed during this time? Do they reflect what has happened in the larger market? Please share your thoughts with other readers here.

Amazon and its sellers need each other.

September 9, 2018September 9, 2018 Phillip Nones Business, Marketing, Marketing Communications, Sales Amazon, Buy Box Experts, Consumer Marketing, E-Commerce, eBay, Online Retail, Retail, Walmart

If you speak with small businesses that sell products online, many will tell you that they chafe under the strong-arm tactics of Amazon and its seller policies.

On the other hand, what’s their alternative?

The reality is that it takes about the same amount of time and effort to run a Walmart or eBay store as it does to run a store at Amazon.

The difference? The sales revenue of a Walmart or eBay store is typically less than 10% of what businesses would generate on Amazon for that same amount of work. That interesting informational nugget comes from James Thompson, a partner at the Buy Box Experts e-tailing consultancy.

(And for small retailers attempting to run their own e-commerce sites, the revenue stream is even lower.)

But even with Amazon’s ascendancy in the world of online commerce, its retail platform remains a frustration to small sellers due to its level of responsiveness to questions and concerns (low) and its sudden, sometimes inexplicable policy changes.

Consumer advocates would counter-argue that Amazon’s seller policies are focused in the right place: looking out for the end-user customer. But others contend that Amazon’s actions aren’t even-handed, nor applied equally.

Take Amazon’s policies on dealing with product shipments and defects. When a seller’s defect order rate goes as high as 1%, Amazon deactivates the vendor’s account automatically. To be reinstated, a seller has to go through an arduous vetting process, during which time Amazon holds all monies due to the seller until every order is shipped and received – even orders that are in dispute.

To make matters even more onerous, the customer service phone number of the seller disappears, making it next-to-impossible for the vendor to clear up any misunderstandings with an end-customer other than by going through the Amazon portal.

Here’s another example: Without prior notification, last month Amazon instituted a new “Pay by Invoice” policy that allows corporate customers a pay period of 30 days.

While this is a great move from the customer’s point of view, most small businesses are used to being paid in two weeks. The new invoice payment policy squeezes the resources of smaller sellers, which often operate under tighter cashflow conditions than larger retailers.

It is true that bigger brands make up an increasing share of volume in the world of Amazon sellers. Those brands bring in the most money, but small businesses round out the portfolio and remain an important component of realizing Amazon’s aims of becoming the big behemoth with an “always and everywhere” presence in the world of retail.

Considering everything, it would seem that Amazon and its sellers should recognize each other’s worth and how much they mean to each other. Amidst everything, there has to be a win-win position that can be reached to the benefit of everyone.

World brands: Who’s up … Who’s down?

February 22, 2015February 22, 2015 Phillip Nones Advertising, Branding, Business, Marketing Communications, Marketing Research, Social Commentary Amazon, Apple, AT&T Verizon, BMW, Bradesco, Brand Finance, Brand Strength Index, BSI, Burberry, China Mobile, Coca Cola, Emirates, Ferrari, GE, Google, L'Oreal, Lego, McKinsey, Microsoft, MTN, Nike, PWC, Red Bull, Rolex, Royalty Relief, Samsung, Unilever, Walmart, Walt Disney, world brands

Each year, the brand valuation consulting firm Brand Finance produces a report on the strength of the world’s Top 500 brands.

It’s an interesting study in that Brand Finance calculates the values of brands using the so-called “royalty relief” approach – calculating a royalty rate that would be charged for the use of the brand name if it weren’t already owned by the company.

In the 2015 report, just issued, Apple remains the world’s most valuable brand based on this criterion. The Top 10 listing of world brands is as follows:

#1 Apple

#2 Samsung

#3 Google

#4 Microsoft

#5 Verizon

#6 AT&T

#7 Amazon

#8 GE

#9 China Mobile

#10 Walmart

Of these, all but China Mobile were in the Top 10 listing in Brand Finance’s 2014 rankings. Of the others, all maintained their rank except for AT&T and Amazon, which rose, and GE and Walmart, which fell.

The most valuable brands differ by region, however. In fact, Apple is tops only in North America:

Most valuable brand in North America: Apple

… in Europe: BMW

… in Asia/Pacific: Samsung

… in the Middle East: Emirates Air

… in Africa: MTN (M-Cell)

… in South America: Banco Bradesco

As for which brand’s value is growing the fastest, top honors goes to … Twitter?

That is correct: According to Brand Finance, Twitter’s value has mushroomed from $1.5 billion in early 2014 to nearly $4.5 billion now.

Other social platform firms that have experienced big growth are Facebook (up nearly 150%) and the Chinese-based Baidu (up over 160%).

What about in non-tech or social media sectors? There, Chipotle racked up the biggest growth in brand value: nearly 125%. At the other end of the scale, the McDonald’s brand has lost about $4 billion in value over the past year.

Most Powerful Brands

In addition to its brand value analysis, Brand Finance also publishes a ranking of most powerful brands based on its “brand strength index” (BSI). This index focuses on factors more easily influenced by marketing and brand management activities — namely, marketing investment and brand equity/goodwill.

In this analysis, Brand Finance comes up with a very different set of “top brands” – led by Lego:

#1 Lego: BSI = 93.4

#2 PWC (PricewaterhouseCoopers): 91.8

#3 Red Bull: 91.1

#4 (tie) McKinsey: 90.1

#4 (tie) Unilever: 90.1

#6 (tie) Burberry: 89.7

#6 (tie) L’Oréal: 89.7

#6 (tie) Rolex: 89.7

#9 (tie) Coca-Cola: 89.6

#9 (tie) Ferrari: 89.6

#9 (tie) Nike: 89.6

#12 (tie) Walt Disney: 89.5

According to Brand Finance, Lego’s brand power stems from it being a “creative, hands-on toy that encourages creativity in kids and nostalgia in their parents, resulting in a strong cross-generational appeal.” Lego also has a big consumer marketing presence, thanks to its brand activities in film, TV and comics.

Last year’s top brand was Ferrari, which has now slipped in the rankings. Brand Finance cited the brand’s 1990s-era “sheen of glory” as wearing a bit thin 20 years on.

For more details on these brands and other aspects of the 2015 evaluation, you can review Brand Finance’s 2015 report here.

Do any of the results come as a surprise to you? Please share your observations with other readers as to why certain specific brands are coming on strong while others may be fading.