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To start, here are six indicators of Amazon’s success that can predict the future of retail:
- The number of units sold on the Amazon marketplace doubled in 2014.
- Amazon marketplace sellers sold 23% more units on Cyber Monday 2014 vs. the same day in 2013.
- In 2014, Amazon marketplace sellers from over 100 countries sold products to customers in 185 countries.
- Chinese sellers on the Amazon marketplace grew 80% in 2014.
- Holiday deals offered by Amazon marketplace sellers increased 250% in 2014.
- Units sold on Amazon Marketplaces in 2014 increased 400% over 2013.
So, what does this tell us?
- Items 1 & 2 tell us that Marketplaces REALLY WORK.
- Items 3 & 4 tell us that Cross Border Trade REALLY WORKS.
- Item 5 & 6 tells us that the promotional environment of holiday 2014 was CRAZY.
I find this all very interesting since these are the exact same points that I have made over and over again when discussing Alibaba.
If you look at the most successful internet companies in the US and China you see the same three things:
- Marketplaces are a big deal, a really BIG DEAL.
- Cross border trade is a big deal, a really BIG DEAL.
- Promotions can be huge to an organizations growth and profitability.
To be successful you must turn these factors in assets. The only way to make this happen is to create a plan your firm. To do this, you MUST have:
- A PLAN FOR MARKETPLACES
- What marketplaces should you sell your products?
- What products from others should you place in your marketplaces?
- How should you handle the supply chain for your marketplaces?
- A PLAN FOR CROSS BORDER TRADE
- In what countries should you sell your products?
In stores
Online
On marketplaces - In what counties should you sell through others?
- How should you handle the supply chain for your cross border trade?
- In what countries should you sell your products?
- A PLAN FOR PROMOTIONS
- Promotions are marvelous when done correctly, but can destroy a brand when done poorly
- Promotions must contribute to Profitable growth, not to unprofitable growth
- Promotions need to be done in the context of an omnichannel strategy and not as a knee jerk reaction to competition
So Amazon and Alibaba are both doing many things well. We need to learn from these giants and put forth a plan for marketplaces, cross border trade, and promotions that allow us to grow both our top and bottom lines.
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