Amazon wins again
Monster merchant Amazon.com has outdone itself once again, coming out as the number one site for online holiday purchases, despite attempts by other big box retailers like Wal-Mart and Target to offer competitive discounts and free delivery.
Sales keep growing (and growing, and growing)
Between November 1 and December 6, Amazon took 39.3 percent of all online spending, up a few points from last year’s 37.9 percent, according to Slice Intelligence, which collects data from the email receipts of 3.5 million online shoppers.
In order to reach 39 percent of sales, you’d have to combine the sales from the next twenty one top online retailers, including big names like Wal-Mart, Target, Best Buy, Macy’s, Nordstrom, and Home Depot.
As you might imagine, online shopping increases significantly in the months of November and December, as people buy gifts for the holidays and spend their Christmas bonuses. Forrester Research says that online spending increases 11 percent during November and December, up to $95.5 billion. Sales spike again during the second week of December, as people shop for last-minute holiday gifts. And while online sales generally grow about 15 percent during this week, Amazon’s sales increased 19.5 percent.
The heart behind it all: two-day shipping and one-hour shipping
Amazon’s success is largely due to its fast infrastructure. The company has spent twenty years and billions of dollars building warehouses and shipping hubs in 69 cities around the United States. This has made it possible for the company to offer highly competitive and fast shipping options. Amazon won customers over with two-day delivery service, and has now expanded one hour Prime Now deliveries in several cities.
Big investments paid off
According to Ken Cassar, vice president of Slice, Amazon’s founder and CEO Jeff Bezos “was beaten up for a long time” for making big investments in infrastructure that, at the time were a “drain on profitability.” It turns out, those investments were well worth it, and are paying off big time now that the site is dominating holiday e-commerce.
