ChannelAdvisor Amazon.com Strategy 2014

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ChannelAdvisor Amazon.com Strategy 2014

  1. 1. Amazon’s Retail Impact Strategic Partner and Fierce Competitor Scot Wingo, CEO ChannelAdvisor Corp
  2. 2. What we KNOW About Amazon: • #1 online retailer • #4 overall retailer for 2013 – (Wal-mart-$328, Target-$71, Costco-$71) • #2 overall for 2014 • $67m in 2013, Growing 26% y/y • 224m active buyers - Growing 19% y/y
  3. 3. • 60% US, 40% Intl • Media: 35% • Electronics and General Merchandise (EGM): 65%
  4. 4. Amazon vs. Walmart
  5. 5. What we DON’T know: How do they do it?
  6. 6. What we DON’T know…
  7. 7. Amazon’s Secret Sauce: 1. Selection 2. Value 3. Fast Shipping
  8. 8. Amazon Marketplace Deep Dive
  9. 9. The Amazon Marketplace
  10. 10. Amazon’s 3P Marketplace Creates a Perplexing Financial Situation
  11. 11. • Q3 Revenue: $17.1b • 40% of UNITS were 3P • Q3 1P Revenue: $15.4b • Q3 3P Revenue: $1.7b • Q3 3P GMV: $17b • TOTAL Q3 GMV: $15.4+17.1=$32.5b
  12. 12. Bottom Line: Amazon is 2X the size everyone thinks it is
  13. 13. Amazon will transact over ~$120b GMV this year
  14. 14. Amazon vs. Walmart Round 2 (with the power of Marketplace)
  15. 15. Source: WMT/AMZN Reports and ChannelAdvisor Analysis 97 Amazon vs 77 Walmart (with GMV)
  16. 16. Source: WMT/AMZN Reports, Morgan Stanley (AMZN) and Wells Fargo (WMT) estimates and ChannelAdvisor Analysis When Will Amazon be Bigger than Wal-Mart?
  17. 17. “We shifted money from TV and print advertising to customers through lower prices and free shipping… we’re pleased with the results.” – Jeff Bezos
  18. 18. Fast, Free Shipping – Prime+Super Saver
  19. 19. Amazon – FC Footprint 26
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  25. 25. Amazon – FC Footprint – 46+8=54 45m sq-ft
  26. 26. Amazon – Intl FC Footprint 43+5=48 24m sq-ft That’s 89+13=102 FCs, > 70m sq-ft of space
  27. 27. • Amazon acquired Kiva in 3/12 for $775
  28. 28. How do they do it? 3 “Flywheels” Connected by…
  29. 29. • Jan 2014 – Amazon announced ‘tens of millions’ Prime users • We estimate 10% of the user base is Prime • (22m prime subscribers) • Amazon Prime members spend 4X non-prime members • Therefore the Amazon Prime ‘wallet’ is 40%
  30. 30. Marketplace Fulfillment Network • Selection • Product Value • Unit Profits • 100+ Global FCs • Fast Shipping • Value Shipping
  31. 31. Clash of the Titans Amazon vs. ____ (Google, Apple, eBay, etc.)
  32. 32. Where do you start online shopping? 2010: 43% Google, 11% Amazon 2011: 43% Amazon, 11% Google 2012: 53% Amazon, 11% Google
  33. 33. • Mobile phone to delivery in as little as one hour • Partner with large retailers and local stores • San Francisco, New York, San Jose • Future: Chicago, Dallas, international
  34. 34. • Piloting in San Francisco • Partner with large retailers and local stores
  35. 35. Amazon’s E-Commerce Ripples
  36. 36. Marketplace Explosion
  37. 37. The Race for Same Day Shipping • Retailers are investing heavily in Ship to Store • Even eBay! • Tons of startups:
  38. 38. Amazon’s Limitless Ambitions
  39. 39. “Your margin is my opportunity.” -Jeff Bezos
  40. 40. Industry Who’s at risk? Amazon Offering Grocery All grocery stores Amazon Fresh B2B/Industrial Supply Grainger, Ferguson, etc. Amazon Supply Books/Newspaper Entire print industry Kindle Cloud computing/infastructure HP, Dell, Microsoft,, IBM, SAP, Red Hat, Google Amazon Web Services (AWS)
  41. 41. Industry Who’s at risk? Amazon Offering E-commerce webstore Magento, DWRE, etc. Amazon Webstore Payments PayPal, MC, Visa Checkout By Amazon Shipping UPS, Fedex, UPS Fulfillment by Amazon Banking ? Amazon Lending Amazon Club? Warehouse clubs Costco, BJ’s, Sam’s Ads Ad networks (Yahoo!, Google, DoubleClick, etc.)
  42. 42. Amazon Fresh • Seattle for 5+yrs • Now expanded to LAX, SFO • 40 markets in 2014? • Amazon Prime Fresh - $299/yr – Free same day delivery (> $35)
  43. 43. Amazon Supply
  44. 44. What Can I Do? What Should I Do?
  45. 45. Who has ‘beaten’ Amazon?
  46. 46. Who is ‘beating’ Amazon?
  47. 47. Six New Categories of E-Commerce Innovation
  48. 48. 10 Strategies to Survive THRIVE in an Amazon World
  49. 49. 1. If you can’t beat ‘em, join em. 2. Try to out-Amazon,Amazon 3. As a retailer, you need to own some brands 4. Ride international growth waves 5. Leverage your assets, don’t let them be (online) liabilities.
  50. 50. 6. Keep experimenting with Social 7. What does a world with free 1-day shipping look like? Same day? 8. Embrace Google Shopping 9. Consider an eBay outlet 10. Mobile will be 30-50% of traffic very soon. Be ready (app and mobile web).
  51. 51. Amazon Product Ads
  52. 52. Feature Product page on Amazon   Consumer checks out on Amazon  X Consumer checks out on your site X  Customer Acquisition X*  PPC X  CPA  X High exposure if item for sale already  X Amazon sees sales data  X Available in all categories  X FBA Gives Access to Prime buyers  X Repricing for competitive positioning  X
  53. 53. Think in terms of three buckets of product: 1. Overlapping selection - Product that is already sold by Amazon 2. Unique selection, non-strategic – Product not sold by Amazon today that is non- strategic 3. Strategic selection – Selection you would never want available via Amazon for strategic reasons
  54. 54. For More Information… • Strongly recommend reading the Bezos 97 letter to shareholders • Everything Store:
  55. 55. Contact info: scot@channeladvisor.com Twitter.com/scotwingo Blogs: • eBaystrategies.blogs.com • Amazonstrategies.com • Csestrategies.com • Searchmarketing.com

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