Echo turns up the volume on Amazon's ambitions as audacious bets pay off
From delivery drones to Alexa devices, Amazon's commitment to innovation is helping the company maintain its e-commerce dominance. New data from Slice Intelligence shows this innovation is paying off as spending with Amazon – including sales from first and third party sales, Amazon.com and Prime Now – accounts for 43 percent of all the revenue generated in the U.S. online market in 2016. Even more astonishing, Amazon accounted for 53 percent of all online sales growth in the United States. No small feat as e-commerce grew by 24 percent last year, and will likely account for 10 percent of consumer sales in 2017.
Echo and other electronics sales keep Amazon on top
Electronics account for a significant portion of Amazon's growth; not surprising given the size of the category and Amazon’s very successful Echo line of products. More interesting is the contribution that smaller categories such as home and kitchen, food, and health and beauty made to Amazon’s sales growth. CPG is proving to be a big catalyst of Amazon's expansion.
Amazon's shipping speeds are in their Prime
Why has Amazon’s dominance continued in the face of stiff competition from every major retailer? Simply put, Amazon maintains an obsessive focus on removing every pain point from the buying process. This is clearly exemplified with its Prime program, with free, reliably quick shipping. While the rest of the market is investing to get our packages to us faster, Amazon still maintains a significant lead. By December of 2016, the average Amazon package was delivered in 3.4 days, compared with 5.6 from everyone else.
But it’s more than just shipping speed. Subscriptions, for instance, account for significant portions of certain categories. Similarly, dash buttons allow us to re-order at the click of a button. Our Echo devices allow us to make quick purchases while we wash the dishes.
There is no doubt that Amazon is hitting on all cylinders. The big question in 2017 will be whether Amazon can continue to execute well online at the same time that it embarks on its biggest challenge yet, imagining and building the store of the future.
About this data
With a panel of over 4.4 million online shoppers, Slice Intelligence gives the most detailed, and accurate digital commerce data available, and is reported daily.
Slice Intelligence is the only service to measure digital commerce directly from the consumer, across all retailers, at the item level, and over time. Our retailer-independent methodology precisely measures commerce as it happens. By extracting detailed information from hundreds of millions of aggregated and anonymized e-receipts, Slice can map the entire Purchase Graph, connecting each and every consumer to all their purchases.
Slice gets its data from e-receipts – not a browser, app or software installed by the end-user – so its measurement reflects comprehensive shopping behavior across multiple devices, over time which are key in an increasingly omnichannel retail world. Slice Intelligence is the exclusive e-commerce data provider for the NPD’s Checkout Tracking e-commerce service.