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Resolution Innovation Corner: Alexa and Prime Air Poised to Change e-Commerce

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Did you catch Amazon’s commercials during the Super Bowl? There were three. At an estimated $5 million per 30-seconds during the big game, two of Amazon’s 10-second spots featured Echo and Alexa. Their final spot featured a bag of Doritos being delivered outside a consumer’s window by drone. Enter, Prime Air.

30 Minutes or Less (Just Like Pizza!)

As we’ve seen, Amazon and the consumer electronics industry are giddy with Alexa. She’s everybody’s new darling and Prime Air makes her much sweeter. Prime Air promises delivery within 30 minutes or less — just like pizza delivery. Think about it, anything you can order on Amazon can arrive at your door in under 30 minutes (as long as it weighs 5-pounds or less). This is no longer science fiction — Amazon made its first delivery via drone in the UK in December just two months ago.

So what impact does Amazon’s investment in drone delivery have? One thing is for certain, Amazon is not backing down on shopping domination. We’re talking about e-Commerce in the US that could one-up the standard same-day delivery that Alibaba and other China-based companies have offered for years.

Delivery and Demand

A quick survey of more than 200 people across the US provided some insight into how this new service might change shopping behavior:

  • The majority of respondents visit a local supermarket or department store several times a week.
  • 100% of respondents report they shop online; 99% shop at Amazon.com, 27% of whom are a Prime member.
  • Respondents report that convenience is the number one reason they shop online, followed by selection.
  • 25% of respondents have an Amazon Echo at home, and another 10% have either Google Home or Siri.
  • 57% indicate they are not familiar with Prime Air.
  • 60% report that if they knew they’d receive their items within 30 minutes, they would change the way they shop online.
  • 65% said they would go to the market less often if they could receive their items within 30 minutes.
  • Respondents indicate they would start buying other items from Amazon like CPG products (e.g. toilet paper and tooth paste), soda and auto parts.

Impact on the Industry

 Deloitte’s Consumer Products Industry Outlook projects CPG will be a $36 billion industry by 2018. That represents a nearly $30 billion jump in only five years and Amazon is prime to capitalize on that growth with its budding delivery service.

2017 Consumer Products Industry Outlook
Deloitte’s 2017 Consumer Products Industry Outlook

As of last quarter 2016, 8.4% of all retail sales were e-Commerce, so there’s a treasure trove of opportunity for Amazon. The average growth rate of e-Commerce is 16.45%, so we can expect next year’s tally to be in the 10% range.

Marketers, Prepare

 The best position to capitalize on this new e-Commerce development is to optimize your virtual shelf. Make sure that your product feeds are up to date and employ SEO best practices. In addition, stay on top of all that’s new with voice activated search. The time will come — and I predict very soon — when we we’ll have the opportunity to buy and optimize our product listings on Amazon and A9.

 

If you want to discuss how to optimize your virtual shelf, please get in touch with me @SEMSage or nadzentoivich@resolutionmedia.com.