When Do We Jump On Board with Amazon?!

It’s 2017…Who hasn’t used Amazon by now? For most of us, it is a convenient option to get whatever we want whenever we want at extremely competitive prices.  However, for small businesses and brick-and-mortar retail stores, it’s the demise of the way we used to acquire goods.  Amazon is forcing many businesses to change not only their marketing strategies, but their entire infrastructure in order to stay relevant.  Companies who are currently ignoring the trend towards online retailing will quickly realize that either they will need to restructure or fall victim to the category “Death By Amazon.”

Amazon has continued to close the gap on retailers over the past several years and is a juggernaut catalyst in the decreasing margins many of these competing stores are feeling. In summation, it’s kill or be killed by the internet giant. But that’s just the US….While many business owners struggle with this behemoth; an even greater number of individuals are unaware of Amazon’s younger (but bigger) brother called Alibaba. Alibaba is the Chinese Internet version of Amazon, founded in 1999 and IPO’d to world equity markets in September 2014.  Alibaba currently exceeds Amazon and eBay in a variety of business-related metrics.  For starters, their customer base dwarfs Amazon, as there are close to 1.4 billion people in China compared to 321 million in the United States.

Currently, Alibaba competes directly with on-line retailers like Amazon and eBay in Europe, Rakuten in Japan and Kobo in Japan.  Their construct is a bit unique in that the company is actually a conglomerate of smaller companies while maintaining a sizable interest in a number of larger digital companies. As both of these corporate giants continue to grow, their objectives are aligned; quest for expansion and greater market presence ensues. Recently, Amazon grabbed the spotlight with the announcement of its current pending acquisition of Whole Foods Market, once again exhibiting its desire to reach new market segments.  Another correlation between the two is their ability to corner the global market in one-day promotional records.

Looking back to 2013, Alibaba initiated its first “Single’s Day” Promotion on November 11th. This one-day promotional event became China’s biggest shopping day of the year.  Baba’s total sales were just shy of 5.6 billion and shattered Cyber Monday’s sales of 1.7 Billion, with Amazon being the “prime” force (wink wink) attributing to the majority of the latter figure.   Fast forward just 2 years and Alibaba smashed existing records and reported 14.3 billion within the 24 hour event. This further demonstrates that there is no stopping the momentum and continuous evolution towards the online shopping boon. Recently, Amazon’s Prime Day has made headlines and has become a major success. In the company’s third annual promotional day, they reported a record number of Prime members had shopped across thirteen countries, and sales grew over 60%.  Prime Day surpassed not only Amazon’s Black Friday sales, but Cyber Monday as well.

The marketing goal for Prime Day was to create not only new Prime members but to promote an innovative idea in showcasing the wide range of products.  They appeared to have succeeded in both categories, with more new members signed up on Prime Day than on any other single day in Amazon’s History.   Amazon and its international competitors are proving that the key to any successful retail is knowing your target audience and strategically running promotional marketing plans. They have pioneered a retail market in the digital world and become an enormous weight over the heads of smaller businesses. Mom and Pop, look out below…