2017 has been a monster year for North America’s largest online retailer as it continues to gain market share across multiple product categories and become a growing threat to basically everyone in retail—online and offline.
What was particularly striking this year, however, was Amazon’s growing presence in other areas of life outside of the straight purchasing of products on the internet.
Amazon, No. 1 in the Internet Retailer 2017 Top 500, now has a healthy portfolio of physical store space—with a few of its own locations and Whole Foods stores—that it can use as pickup points for online orders or sell its in-home voice assistance. Sales of the Amazon Echo, Dot or Tap voice assistants are on the rise, and so now Amazon (via Alexa) is literally in our bedrooms waking us up in the morning, in our bathrooms playing music and in our kitchens documenting our shopping lists.
Here are five top stories from the year that document Amazon’s growing dominance of retail markets,plus its moves into other industries:
1. Amazon Prime members climb to 90 million, up nearly 40% from 2016
Consumers go to Amazon.com first for their purchases because there are fewer reasons to go anywhere else. Thanks to such great perks as free two-day delivery (sometimes faster), free music and streaming video, Prime memberships (typically $99 a year) are increasingly attractive.
Nearly 30% of all Americans are now Prime members, and these consumers are spending more with Amazon and shopping online with them more often.
2. Amazon buys Whole Foods
This news sent shockwaves into every area of retail, as the grocery market has largely been one in which Amazon has only dipped its toes. It also grows the company’s physical footprint, allowing it another entire channel to sell its hardware products, not to mention locations to handle returns and pickup of online orders. Here’s a great analysis from Forrester Research on what the acquisition means for everyone else.
3. Amazon becomes a major player in PLAs
To some, the fact that Amazon is investing in a new ad format on Google may seem like a minor thing. Well, it’s not. Google’s Product Listings Ads are a growing part of retailers’ search strategies. PLAs accounted for 53% of Google search ad clicks among U.S. advertisers and have been a particularly effective way for smaller retailers to acquire customers. The fact that Amazon, with its giant budget and product catalog, is a growing player here makes it less and less likely that retailers not named Amazon can have their products found on Google.
4. Infographic: Amazon’s US fulfillment strategy
Putting together this infographic was a shocking endeavor. Amazon’s growing investments in its fulfillment network are not that much of a surprise. Through the first nine months of the year, it spent $655 million on fulfillment expenses, a 40% increase over 2016. That has been well documented by Internet Retailer and other news outlets.
But to see the number and size of these centers in one map, blanketing the country, should dispel any questions about how Amazon is able to deliver so much faster and more efficiently than any of its competitors. It also should show store-based retailers that the only way they can compete on delivery times is to use their stores to fulfill online orders or serve as pickup and return points. Thankfully, many are now getting this memo and beefing up omnichannel strategies that do just that.
This also makes me think about the delivery carriers. As Amazon builds its network and gets products closer and closer to consumers’ doorsteps, there’s less need for some other company to deliver it.
5. Paging Dr. Amazon
In October, Amazon got approval from several state pharmaceutical boards to become a wholesale distributor of prescription medications—one logical step it would need to take to become an online (or offline?) pharmacy.
This news sent shares of U.S. pharmacy chains, not to mention other healthcare players, downward.Favorite