Tag: e-commerce

Death by Amazon

By Rebecca Ungarino for Market Insider

A new “Death by Amazon” index released by the investment-research firm CFRA tracks the stocks its analysts believe could be short-seller targets given their vulnerabilities to competition from Amazon.

The index is full of home goods and electronics retailers like Party City and Bed Bath & Beyond, some of which have seen their entire market value wiped out in recent years.

Investors are familiar with the Amazon effect by now.

The e-commerce juggernaut announces that it is preparing to enter into an industry – be it medication, brick-and-mortar grocery, entertainment, or others – and the stocks of companies in the new target market fall as jittery investors are struck with the fear that irreversible disruption is coming.

So the investment-research firm CFRA created a new index, “Death By Amazon,” that tracks the stocks its analysts think are particularly vulnerable to Amazon’s expansion and offerings.

“The equally weighted index serves as a retail performance benchmark and short-selling idea generation tool for our clients,” CFRA analysts Camilla Yanushevsky and Todd Rosenbluth wrote in a report to clients earlier this month.

To pinpoint the 20 constituents the analysts believe are poorly positioned to compete against Amazon’s efforts in various industries, they evaluated the companies’ “Share of Voice” data that comes from web-traffic analytics company Alexa Internet (which is owned by Amazon as its other Alexa-named product).

That measure shows the percentage of searches for a keyword across major search engines in the past six months “that sent organic traffic to the respective site.”

For example, the analysts compared how much traffic was going to a national jewelry retailer’s website when consumers search for the term “jewelry” versus how much traffic was going to Amazon for the same search term.
With this kind of analysis, you get an index full of brick-and-mortar retailers whose products are available on Amazon – and apparently less popular through online searches – from floor tiles to party supplies.

To be fair, it’s not the first Death by Amazon index. Bespoke Investment Group had already created its Death by Amazon index, tracking the same theme.

Here are all the stocks listed, in alphabetical order, with how their “Share of Voice” scores for various products stack up against Amazon:

  1. At Home Group
    1-year performance: -40%
    % below all-time high: -46%
    Share of Voice score for “seasonal decor”: 4.2%
    Amazon’s Share of Voice score for “seasonal decor: 19.6%
  2. Barnes & Noble Education
    1-year performance: -38%
    % below all-time high: -74%
    Share of Voice score for “textbook”: 1.3%
    Amazon’s Share of Voice score for “textbook”: 6.9%
  3. Barnes & Noble
    1-year performance: -0.1%
    % below all-time high: -84%
    Share of Voice score for “books”: 23.2%
    Amazon’s Share of Voice score for “books”: 12.2%
  4. Bed Bath & Beyond
    1-year performance: -16%
    % below all-time high: -80%
    Share of Voice score for “cookware”: 2.4%
    Amazon’s Share of Voice score for “cookware”: 23.3%
  5. Best Buy
    1-year performance: -14%
    % below all-time high: -19%
    Share of Voice score for “electronics”: 1%
    Amazon’s Share of Voice score for “electronics”: 8.1%
  6. Big 5 Sporting Goods
    1-year performance: -71%
    % below all-time high: -88%
    Share of Voice score for “fitness equipment”: 0%
    Amazon’s Share of Voice score for “fitness equipment”: 11%
  7. Big Lots
    1-year performance: -6.5%
    % below all-time high: -41%
    Share of Voice score for “cookware”: 0%
    Amazon’s Share of Voice score for “cookware”: 23.3%
  8. Dick’s Sporting Goods
    1-year performance: +15%
    % below all-time high: -43%
    Share of Voice score for “sports deals”: 18.7%
    Amazon’s Share of Voice score for “sports deals”: 24.5%
  9. GameStop
    1-year performance: -31%
    % below all-time high: -87%
    Share of Voice score for “video games”: 7%
    Amazon’s Share of Voice score for “video games”: 17.1%
  10. Kirkland’s
    1-year performance: -49%
    % below all-time high: -81%
    Share of Voice score for “home decor”: 5.4%
    Amazon’s Share of Voice score for “home decor”: 10.8%
  11. Office Depot
    1-year performance: -19%
    % below all-time high: -95%
    Share of Voice score for “office supplies”: 33.1%
    Amazon’s Share of Voice score for “office supplies”: 9.8%
  12. Overstock.com
    1-year performance: -67%
    % below all-time high: -86%
    Share of Voice score for “dresser”: 1.3%
    Amazon’s Share of Voice score for “dresser”: 9.9%
  13. Party City
    1-year performance: -49%
    % below all-time high: -65%
    Share of Voice score for “party supplies”: 22.5%
    Amazon’s Share of Voice score for “party supplies”: 13.2%
  14. PetMed Express
    1-year performance: -40%
    % below all-time high: -60%
    Share of Voice score for “pet supplies”: 5.1%
    Amazon’s Share of Voice score for “pet supplies”: 13.7%
  15. Pier 1 Imports
    1-year performance: -65%
    % below all-time high: -97%
    Share of Voice score for “home decor”: 8.3%
    Amazon’s Share of Voice score for “home decor”: 10.8%
  16. Signet Jewelers
    1-year performance: -49%
    % below all-time high: -87%
    Share of Voice score for “jewelry”: 3.8% for kay.com, 2.9% for jared.com, and 0.12% for zales.com
    Amazon’s Share of Voice score for “jewelry”: 10.7%
  17. The Michael’s Companies
    1-year performance: -43%
    % below all-time high: -67%
    Share of Voice score for “drawing supplies”: 13.1%
    Amazon’s Share of Voice score for “drawing supplies”: 24.5%
  18. Tiffany & Co.
    1-year performance: -5%
    % below all-time high: -31%
    Share of Voice score for “jewelry”: 6%
    Amazon’s Share of Voice score for “jewelry”: 10.7%
  19. Tile Shop Holdings
    1-year performance: -36%
    % below all-time high: -85%
    Share of Voice score for “tile”: 2.1%
    Amazon’s Share of Voice score for “tile”: 22%
  20. Williams Sonoma
    1-year performance: +7%
    % below all-time high: -42%
    Share of Voice score for “cookware”: 16.7%
    Amazon’s Share of Voice score for “cookware”: 23.3%

E-commerce could create 3m jobs in Africa

Source: Fin24

Online marketplaces establishing themselves across Africa could create around 3-million new jobs by 2025.

These digital platforms, which match buyers and providers of goods and services, could also raise incomes and boost inclusive economic growth with minimal disruption to existing businesses and workforce norms.

These are among the findings of a new report, How Online Marketplaces Can Power Employment in Africa, released by Boston Consulting Group (BCG).

Generating employment is an urgent priority across the continent. The African Development Bank estimates that one-third of the 420 million Africans aged 15 through 35 were unemployed as of 2015.

Around 58% of the new jobs—created directly, indirectly, and through the additional economic activity generated by online marketplaces—will be in the consumer goods sector, 18% will be in mobility services, and 9% in the travel and hospitality sector, according to the report.

For online marketplaces to reach their full potential, however, the public and private sectors must work together to build the right digital environment from the outset, the report notes.

Obstacles to industry expansion include underdeveloped infrastructure, a lack of regulatory clarity and limited market access.

The economic and social benefits of online marketplaces

“Online marketplaces are a good illustration of how the digital revolution can create economic opportunity and improve social welfare in Africa,” says Jan Gildemeister, BCG partner and managing director based in Johannesburg.

“Because Africa currently lacks an efficient distribution infrastructure, online marketplaces could create millions of jobs.”

Concerns that growth in online marketplaces will merely cannibalise the sales of brick-and-mortar retailers are misplaced in the case of Africa, according to the report.

There were only 15 stores per one million inhabitants in Africa in 2018, compared with 568 per million in Europe and 930 in the US. This extremely low penetration suggests that there’s minimal risk that e-commerce will displace existing retailers and that much of the population is underserved.

The report also details the ways in which economic activity generated by online marketplaces boosts employment and incomes.

These businesses create demand for personnel in new fields, such as platform development, as well as for merchants, marketers, craftspeople, drivers, logistics clerks, and hospitality staff.

Some also offer skills-development programs and help small enterprises raise capital to expand their businesses.

Online marketplaces also boost demand for goods and services in areas currently beyond the reach of conventional retail networks and bring new people—such as women and youth who may be currently excluded from labour markets—into the workforce.

The report recommends that the online marketplace community and African governments collaborate to address the challenges that hinder the online marketplaces’ ability to grow.

Source: eMarketer Retail 

When it comes to the US e-commerce market, Amazon is leaving the competition in the dust. This year, the online shopping juggernaut will capture 49.1% of the market, according to eMarketer’s latest forecast on the top 10 US e-commerce retailers, up from a 43.5% share last year. Amazon now controls nearly 5% of the total US retail market (online and offline).

Amazon will generate $258.22 billion in US retail e-commerce sales this year, up 29.2% over last year. Amazon’s Marketplace sales will represent an increasingly dominant portion of its e-commerce business—68.0% this year, compared with 32.0% for Amazon direct sales. By the end of 2018, sales generated from Amazon’s Marketplace will be more than double that of Amazon’s direct sales in the US.

“The continued growth of Amazon’s Marketplace makes sense on a number of levels,” eMarketer principal analyst Andrew Lipsman said. “More buyers transacting more often on Amazon will naturally attract third-party sellers. But because third-party transactions are also more profitable, Amazon has every incentive to make the process as seamless as possible for those selling on the platform.”

Computer and consumer electronics is the leading product category for Amazon, with sales of $65.82 billion in the US this year, representing more than a quarter of its retail e-commerce business.

In 2017, apparel and accessories surpassed books and music to become the second largest category. Apparel sales will grow more than 38% this year to reach $39.88 billion in the US. This category will represent 15.4% of Amazon’s e-commerce business, and 38.5% of all online apparel sales in the US.

But Amazon’s private-label push is being met with apprehension by several brands and retailers.

“While they are dependent on Amazon as a selling channel, they also recognize the threat to their brands should Amazon decide to compete by introducing its own private labels,” Lipsman said.

Other fast-growing categories for Amazon are food and beverage* and health, personal care and beauty. Food and beverage will grow more than 40% this year, while health and beauty will jump nearly 38%. Still, both categories represent just a small portion of Amazon’s US retail ecommerce sales.

“Amazon’s strategy for food and beverage is no different, in some respects, than it was for books—dominate the category,” eMarketer senior analyst Patricia Orsini said. “However, e-commerce in the grocery sector is a challenge. Share of online sales in this category is low because most people, for a host of reasons, prefer to buy food in brick-and-mortar stores. Amazon has an advantage because its shopper base is comfortable with shopping online. Along with insights gathered about Whole Foods shoppers, Amazon probably has the best chance of converting in-store grocery buyers to online grocery buyers.”

Amazon looks to access consumers’ houses

Amazon has announced Amazon Key, a lock and camera system that users control remotely to let delivery associates slip goods into their houses.

Customers can create temporary passcodes for friends and other services professionals to enter as well.

The move may help Amazon capture sales from shoppers who can’t make it home to receive an order in person, and don’t want the package stolen from their doorstep.

Amazon has announced Amazon Key, a lock and camera system that users control remotely to let delivery associates slip goods into their houses.

Amazon Prime members can pay $249.99 (£190) and up for a cloud-controlled camera and lock that the company offers to install.

Delivery associates are told to ring a doorbell or knock when they arrive at someone’s house.

If no one greets them, they press ‘unlock’ in a mobile app, and Amazon checks its systems in an instant to make sure the right associate and package are present.

The camera then streams video to the customer who remotely can watch the in-home delivery take place.

The associate cannot proceed with other trips until the home is again locked.

It is unclear if such protections will persuade customers that the service is safe to use.

‘This is not an experiment for us,’ said Peter Larsen, Amazon vice president of delivery technology, in an interview.

‘This is a core part of the Amazon shopping experience from this point forward.’

Members of Amazon’s Prime shopping club can pay $249.99 (£190) and up for a cloud-controlled camera and lock that the company offers to install.

Delivery associates are told to ring a doorbell or knock when they arrive at someone’s house.

If no one greets them, they press ‘unlock’ in a mobile app, and Amazon checks its systems in an instant to make sure the right associate and package are present.

The camera then streams video to the customer who remotely can watch the in-home delivery take place.

The associate cannot proceed with other trips until the home is again locked.

It is unclear if such protections will persuade customers that the service is safe to use.

My friend runs a Locksmith North Las Vegas | Top Master Locksmith | 89110 business – and he had skepticism about the idea, being an expert in the field. When I asked him about this, he said he had looked over their troubleshooting procedures and couldn’t see issues from the technical side, only the moral/ethical delivery-guy-not-stealing-anything-inside side. He added that if a problem arises, ‘You can call customer service, file a claim and Amazon will work with you to make sure it’s right,’ reimbursing customers in some cases.

Amazon’s new service goes live on 8 November in 37 US locations, and it is unclear if it will be introduced in other countries in the future. Wal-Mart Stores, Amazon’s biggest retail rival, has similar plans.

It said last month it would test delivering grocery items ‘straight into your fridge’ with August Home, a smart lock business that Assa Abloy AB said it will acquire.

By Shivali Best for Daily Mail 

For SMEs considering including online retail within their omni-channel strategy, there is no time like the present.

As mobile penetration continues to grow, along with the customer’s need for accessibility and convenience, the pros to e-commerce are undeniable. But timing and preparation are integral to any SMEs success in online retail and a premature move into the space could have a considerably negative impact on a business’ bottom line.

“Seeing a brand grow online through social media follows and repeat purchases are just part of the success factors a business needs to measure,” says Matt Roux, CTO for Emerce Commerce. “The reality is that a business owner needs to see that each order is profitable and ideally, that online sales are at least 1% of retail store purchases.”

According to Roux, South Africa also presents trading nuances for which SMEs need to prepare. Costs for fulfilling orders to more remote towns can get very expensive, especially for large dimension products. Another local consideration is that payment gateway providers charge high per-transaction commissions for low volume online stores – a factor that could prove unsustainable for some SMEs.

SMEs therefore need to do a careful brand audit in order to determine if they are ready for the leap into online retail.

Roux provides a four-step checklist to help business owners make a considered decision:

  1. Cost implications: Businesses need to understand the cost implications – both once-off and monthly – for an online store. Courier costs and payment gateway charges are just two of these. Has the business set clear targets for monthly online sales that will assist the path to profitability via the online channel?
  2. Capacity considerations: Having an online store has significant resource implications for a business so SMEs need to check if they have the capacity within their internal team to cover roles and responsibilities including customer servicing; financial reconciliation; order fulfillment management; online merchandising; digital marketing; copy writing; and photography.
  3. Corporate identity: A clear and consistent corporate identity is key to a positive visual impact online. SMEs need to have sufficient lifestyle imagery to bring across the tone of the brand. In addition, between four and eight high resolution product photographs are required for each product. The associated costs here will be determined by how many products the business sells.
  4. Current IT: Does the business have any existing IT solutions that the online store can integrate such as accounting software and warehouse management software?
    Opening up new revenue streams and engaging new customers are just two among many benefits that a move into e-commerce can offer a business.

Amazon is pushing deeper into business-to-business e-commerce, which one analyst estimates could add $18-billion in company revenue by 2020.

The B2B unit, Amazon Business, began as Amazon Supply in 2012. The initiative was rebranded in April 2015 and Amazon — which posted 2015 revenue of $107-billion — recently indicated it reached more than $1-billion in annual sales, with 300 000 customers.

Bank of America Merrill Lynch analyst Justin Post estimates Amazon Business will reach gross merchandise volume of $3,5-billion this year, resulting in revenue of $3-billion.

He anticipates GMV of $8-billion next year and revenue of $6,4-billion. By 2020, estimates Post, Amazon will hit GMV of $25-billion and $18,6-billion in revenue.

“Based on recent management comments, Amazon Business appears to be ready for prime time, and we wouldn’t be surprised if Amazon invests in marketing to raise awareness as Amazon’s procurement systems improve,” said Post in a research note.

According to market research firm Frost & Sullivan, the US B2B market is expected to reach $1-trillion in sales by 2020, and $6,7-trillion globally.

“We think B2B provides significant runway for growth, which could help Amazon sustain its growth rates and premium valuation for many years,” wrote Post.

He has a buy rating on Amazon stock, and a price target of 840.

Amazon stock ended trading up more than 1%, to 704.20, in the stock market today, after touching a record high above 722 on May 12. It’s an IBD Leaderboard stock.

Amazon Business sells a broad line of goods, such as office supplies, tools, industrial equipment, tractor equipment and office products. Competitors in the B2B e-commerce sector include Staples, HD Supply Holdings, Office Depot, Grainger and Fastenal.

By Brian Deagon for www.investors.com

E-commerce spending by South Africans via their mobile devices is set to grow by 70% in 2016, says a survey.

According to research organisation Ipsos, this figure is set to outpace overall e-commerce spend in SA which is forecast to grow by 29% this year.

E-commerce spending via mobiles accounted for 25% or R7-billion of all online transactions in 2015, says Efi Dahan, the Africa and Israel regional director for PayPal. Payment service PayPal commissioned the Ipsos survey.

The survey further reported that South African shoppers spent R28,8-billion online in 2015, which is expected to grow to R46-billion by 2017, of which mobile will account for R19-billion.

“There is no doubt that the rapid penetration of smartphones in South Africa will continue to be the driving force of online shopping in the upcoming years,” says Dahan.

Most South African online shoppers (59%) buy locally, with 37% buying both local and cross border and 5% buying exclusively from international providers.

The most popular online shopping destinations for locals are the US, UK and China, but Dahan warned that security was a challenge.

“I believe that the smartphone shopping experience will continue to evolve as consumers feel greater comfort and security.”

Security firm Trend Micro recently reported that hacked PayPal accounts with a guaranteed balance of $500 (R7 941.54) were traded for $6.43 (R102.51) on the Deep Web.

And Check Point reported that giant e-commerce platform eBay had failed to fix a security flaw dubbed “JSF**k” that allows cyber-crooks to use the platform as a phishing and malware distribution platform.

Dahan says that the online space made geographical borders irrelevant.

“Though international shopping is still less popular locally, with the growing variety of products, larger range of prices, improved shipping options and increasing confidence in e-commerce, we believe that South African consumers will continue to purchase online, regardless of physical borders.”

PayPal is the most popular online payment method for South Africans who shop internationally at 68%, followed by Visa Credit card at 37%, the survey showed.

By Duncan Alfreds for Fin24

Catalogues: they are expensive, restrictive, inflexible and old-fashioned, yet 95% of office supplies dealers still use them. For many dealers, catalogues continue to be their principal sales and marketing tool. Across the Euroffice Group, we stopped printing catalogues a year ago. Our business hasn’t suffered. In fact, the opposite is true.

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Joining the world of electronic commerce may seem daunting if you’re running a small business, but it is easier than ever to get up-and-running with a digital storefront. And with consumers looking for online convenience, allowing them to browse, order and pay online can give your business an edge in a competitive market, says Charles Pittaway, MD at Sage Pay.

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