Amazon continues to dominate the e-Commerce spectrum, generating sales volume for 60% of retailers and manufacturers when comparing marketplaces, according to data from ChannelAdvisor.
ChannelAdvisor commissioned Redshift Research to conduct The 2015 Online Retail Survey. For the report, the companies surveyed more than 200 U.S. and UK retailers and brand manufacturers to discover what consumer behaviors are influencing their sales, and what online strategies they’re using to gain share of wallet. All survey respondents were e-Commerce decision-makers for their respective companies.
More than half (51%) of respondents said their company uses Fulfillment by Amazon (FBA) in order to streamline logistics and reach more Amazon Prime consumers. Additionally, 35% of retailers said Amazon Product Ads and Amazon Sponsored Links provide the highest ROI of all digital marketing channels.
“The results of our 2015 Online Retail Survey signify the rapid growth of Amazon’s third-party marketplace,” said Scot Wingo, Executive Chairman at ChannelAdvisor. “Amazon’s three-pronged approach that focuses on selection, value and convenience has clearly benefited merchants as well as online shoppers, and it’s helped position the company as a leader in e-Commerce.”
Amazon has shaken the retail industry, and its market share is constantly growing. As a result, 48% of retailers say they are “slightly” or “very” concerned with the marketplace’s growth. However, marketplaces like Amazon provide a significant amount of revenue for retailers, with 85% of them using either Amazon or eBay. In total, 32% of respondents said marketplaces account for 31% or more of their total revenue.
After receiving an order online, retailers are striving to process and deliver packages quickly and efficiently. For example, 28% of retailers offer same-day delivery, and 63% offer next-day delivery. More than half (56%) of retailers offer two-day shipping, and 32% of them offering international delivery. Omnichannel delivery methods also are gaining more traction, with 14% of retailers planning to adopt buy online, pickup in-store in 2015.
Social Media Makes An Impact
Retailers use social media to connect with shoppers while they’re at home or on the go. Currently, retailers are present and active on Facebook (89%), Twitter (70%), Instagram (45%) and Pinterest (41%).
The top goals for social media engagement include:
Increase brand awareness (33% of retailers);
Connect with a new generation of customers (24%); and
Advertise deals and promotions (20%).
Although new social networks are constantly emerging, Facebook still has the most impact. In fact, 64% of retailers indicate that the network generates the most sales conversions.
Retailers Plan Holiday Promotions For September Or Earlier
Research from ChannelAdvisor also delved into holiday planning, which continues to be crucial to retail success. Most (74%) retailers said 20% or more of their annual sales come during the holiday season, while 43% said the holiday season makes up 20% to 29% of their total annual sales.
With that said, 59% of retailers plan to start their holiday promotions in September or sooner. This year, 24% of retailers plan to offer more holiday promotions than last year in order to boost overall sales. The outlook for this season looks promising, as 82% of respondents expect their 2015 holiday sales to increase over 2014.
“Retailers continue to push holiday sales earlier and earlier to get in front of the competition,” Wingo explained. “We’ve seen larger retailers kick off their holiday promotions as early as July. It will be interesting to see if consumers respond to early holiday promotions again this year and get out their wallets before Thanksgiving.”
While the 2015 holiday season looks promising, fulfillment continues to be a major challenge for retailers, according to the survey. Up to 34% of respondents said fulfilling orders on time is their biggest challenge during the holidays, with 31% indicating that December 20 would be their cut-off day for guaranteed on-time holiday delivery. Additional holiday challenges include adjusting to competitor activities (27%) and driving conversions among mobile shoppers (19%).