In 1994, Jeff Bezos quit his job and set up Amazon in his garage. A year later, the first item was purchased from Amazon – a book. Within 30 days, it had made $20,000 per week in sales across 45 different countries.
25 years later, and Amazon is a household name. It is the largest online retailer in the world.
Amazon was responsible for 45% of US e-commerce spending in 2019 — a figure which was expected to rise to 47% in 2021. (Statista)
If that is not a success, we do not know what is!
But what makes Amazon so successful? What is it about the model that this online giant created that has taken off so exponentially? Let us take a look at some of the stats and facts about Amazon.
Mobile shopping is becoming increasingly popular due to its ease of personalization, ease of use, and accessibility. Consumers can purchase pretty much anything that they need with no interruption to their busy lives, and the app stores information and delivers everything they need in just a couple of clicks.
Amazon has always been an innovator in the online shopping experience, making the experience for users smooth and hassle-free.
The Amazon app holds the title of being the most popular shopping app in the United States. In September 2019, 150.6 million users accessed the app.
It’s biggest competitor, Walmart, had 76.45 million users, so not only is Amazon the online market leader, but it leads by a huge amount. (Statista)
The reputation of a store is important to consumers. They don’t work long hours to receive shoddy customer service and poor quality goods, so looking at reviews and the trustworthiness of a store is a priority.
89% of consumers say that they trust Amazon and are more likely to purchase from them than other e-commerce sites. (Feedvisor)
Nearly half (46.7%) of U.S. Internet users started product searches on Amazon compared with 34.6% who went to Google first. (Adeptmind)
“By offering accurate product suggestions online, Amazon became a reliable advisor. By surfacing credible reviews from our peers, Amazon gives us peace of mind during our purchasing decisions. From convenience to price, product selection, and overall experience, Amazon has mastered the customer relationship. In doing so, it has set up a new type of interaction model for consumers.” (Anthony Smith, Forbes)
Amazon launched its subscription service, Prime, in 2005 and is available all over the world. Subscribers benefit from free two-day (or sooner) delivery, music, and video streaming services, and photo storage, amongst other things.
This is all for a small fee every month.
Amazon Prime had 150 million subscribers in 2019, an increase from 100 million the year before. (VentureBeat)
20% of Amazon Prime subscribers shopped a few times a week as opposed to non-members. Around 7% said they shopped on there almost every day. (Statista)
Amazon Prime subscribers spend on average $1000 a year. Those without Prime spend around $100 to $500
1 in 3 Americans have an Amazon Prime subscription – 95 million customers
Amazon sells a wide range of products, from clothes and toys to electronics and furniture. On top of that, there are the books that Jeff Bezos originally started out with, the TV and film streaming, Amazon Pantry and Fresh, Audible, and their smart home products such as the Echo Dot.
This huge variety of products, including those from third-party sellers, has no doubt been one of the main reasons behind Amazon’s global success.
The electronics category is the most popular, with 44% of Amazon shoppers have purchased an electronic product from the store. (Feedvisor)
Toys were the most popular category on Amazon Prime Day
How are consumers accessing the store?
As we mentioned above, the Amazon shopping app is hugely popular but the computer is still king when it comes to making purchases.
67% of Amazon shoppers prefer to use their desktop or laptop computer to access the site. 24% preferred to use their mobile device. (CPC Strategy)
Consumers aged under 35 are more likely to use their mobile device whereas those aged over 55 prefer to use a desktop computer.
Studies have shown that people are more likely to browse products through the app but complete purchases on a computer.
Amazon does not just sell their own products from their own suppliers but has a hugely successful marketplace, where third-party sellers can also sell their goods. Some are shipped directly from Amazon, some sellers retain complete control, but either way, it is a great way for small to medium-sized businesses (SMB) to get their products out on the mass market – cheaply.
While popular, though, most third-party sellers are not loyal to Amazon, with 80% of sellers using other platforms to market and sell their products.
According to reports from Amazon, there were 200,000 sellers worldwide with over $100,000 in sales in 2018 which increased by 12% to 225,000 in 2019.
In 2018, nearly three-quarters of Amazon seller businesses had between just one and five employees. (Statista)
In conclusion, Amazon is the retail giant; there are no ifs and buts about that, and their domination of the e-commerce market is not set to diminish any time soon. While it would be almost to entirely recreate Amazon’s global success, take time to think about the elements that could work for your business: the app, the marketplace, the subscription model – and see if there are ways that you could incorporate this into your business for a taste of the success that Amazon has.