WRITTEN BY – THE STARTUP CHANNEL
SOURCE – REPORT BY MCKINSEY AND COMPANY, GIF GRAPH SOURCE – SPACESHIP BLOG
This year marks the 20th anniversary of Amazon as a public company. And 20 years since Jeff Bezos penned his famous 1997 Letter to Shareholders — the letter that set the precedence for what Amazon would become. It seems like a good time to look back at Amazon overtime and how it has changed. Tomorrow is now today. Amazon is powered by personalisation and at least for shopping, Amazon has become the place for discovery.
According to a report by McKinsey and Company, 52% of people start shopping online with Amazon, up from 47% the year before, and 38% the year prior. What’s interesting is only 26% search via Google (or another search engine), a reduction of just over 50%.
When you breakdown the data into age groups, the preference toward Amazon is even more pronounced for younger age groups.
And it seems Google was well aware of this trend. In 2014, Eric Schmidt said the following about Amazon:
Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon. People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon. They are obviously more focused on the commerce side of the equation, but, at their roots, they are answering users’ questions and searches, just as we are.
And it seems Amazon is getting very good at answering its uses’ questions. But if the 2016 Letter to Shareholders is anything to go off, being the first place people go to spend money online isn’t enough.
The customer continues to be what is most important to Bezos. In 1997 letter, the customer was mentioned 25 times. In 2016, 19 times. It seems focusing on your customer over the long term, works. At least, if their revenue numbers are anything to go off.