One, two, Freddy’s coming for you.
Replace “Freddy” with “Amazon” and you’ve got something that scares marketers even more than a razor-fingered madman who lives in your nightmares.
Amazon is the quintessential disruptor, having long evolved from an online bookseller to an ecommerce juggernaut that’s changed the way we shop through its patented one-click purchase or the digital assistant that’s synced with our shopping carts.
Amazon continues to grow its areas of expertise through acquisitions. In the past six months alone, they have included artificial intelligence companies such as Body Labs and Graphiq; Souq.com, an ecommerce platform known as “the Amazon of the Middle East;” and Whole Foods Market, which cost a whopping $13.7 billion.
That Amazon would buy a grocery store should be less surprising than the fact that not every business currently has an Amazon strategy in place.
In partnership with Catalyst, part of GroupM, ClickZ Intelligence surveyed 250 B2C marketers and 1,600 consumers in the U.S. to get deeper insights into how people use Amazon. In The Age of Amazon: Maximizing the B2C Marketing Opportunity, we found that despite the company’s dominance, only 17% of our respondents have a clearly-defined Amazon strategy.
Of those who don’t, nearly one-third aren’t even aware of the opportunity.
“You need to fish where the fish are,” says Grant Simmons, Vice President of Search Marketing at Homes.com, explaining why one needs an Amazon strategy in the first place. “You can’t ignore a channel which has so much reach.”
However, 63% of the marketers we spoke to plan to increase their Amazon advertising budget over the next year, compared with 54% and 53% who plan to do the same for Google and Facebook, respectively.
But of course, where there are consumers, there are ways to reach and engage with them.
“Amazon is not only the undisputed U.S. ecommerce leader, but a top search engine and critical channel for product discovery,” says Kerry Curran, Managing Partner, Marketing Integration at Catalyst. “With this comes substantial marketing opportunities that continue to evolve. From SEO to paid media to voice activations, Amazon offers countless new opportunities for marketers to propel awareness and sales.”
That Amazon recognizes and capitalizes on so many of these opportunities sheds some light on the company’s agility and ability to constantly innovate. Customers’ behavior has evolved over the years and Amazon has been right there with them.
Though ecommerce certainly has its advantages over physical stores—it’s faster and more convenient, without any lines—most people’s shopping habits fall in the middle somewhere, especially factoring in how frequently people use their smartphones while shopping in brick-and-mortar stores.
One important distinction there is what we discovered when we asked consumers what influences their purchase decisions. In every category, the top two answers were ecommerce sites and product reviews, which are a key feature of Amazon.
At least half of the consumers surveyed also said they typically do “an even mixture of both” when it comes to buying products in five of those categories: baby care, clothing, furniture or home décor, home electronics and personal care. At least 56% of those people also reported buying products in those five categories on Amazon in the last year.
The category in which respondents had the strongest preference was grocery; 72% of people do the majority of their grocery shopping in physical stores. But as Amazon grows in this area, that could easily change.
Of the consumers surveyed who have bought groceries online in the past year, 9% have used AmazonFresh—but 33% are considering it. Similarly, 18% of them have bought groceries with Amazon Prime Pantry, and 28% more are considering doing so in the future.
Amazon Prime had more than 80 million members in the U.S. as of March, a 40% increase over the previous year according to Consumer Intelligence Research Partners. On average, Prime subscribers spend $1,300 on Amazon each year, compared with non-members’ $700 annual spend.
Prime has plenty of perks—including free two-days shipping and access to Amazon’s vast digital library—and will soon have even more at Whole Foods, highlighting the company’s potential to disrupt the grocery space. Amazon Worldwide Consumer CEO Jeff Wilke told USA Today in August:
“We’re determined to make healthy and organic food affordable for everyone. We will make Amazon Prime the customer rewards program at Whole Foods Market and continuously lower prices as we invent together.”
That Amazon is investing so heavily in one of ecommerce’s weakest categories demonstrates the company’s strength as a retailer and foreshadows yet another change in our shopping habits. It also provides even more proof that marketers in 2017 need an Amazon strategy.
Watch the on-demand Age of Amazon webinar to learn more about the research findings and best practice for Amazon Marketing Services, or download the full report here.
Content produced in association with Catalyst, a Search and Social focused digital marketing agency. Click here to read our collaborative content guidelines. Views and opinions expressed in this article do not necessarily reflect those of ClickZ.