Tag Archive | "eating"

Latest Chart Shows How Quickly Amazon is “Eating the Retail World”

CNBC is reporting that MKM Partners analyst Rob Sanderson’s latest chart shows a striking gap that has widened between Amazon and store-based retailers (Wal-Mart, Taraget, Costco, Home Depot, etc.) over the past year. While Amazon still only boasts a 5 percent share of total retail sales, excluding food, across the country, according to data from the U.S. Census Bureau, Sanderson’s chart shows Amazon, in the categories that the company serves, growing its market share, as brick-and-mortar retail sales are on the decline.

The median growth for what MKM Partners calls the top-20 U.S. retailers was 2.4 percent in the fourth quarter of 2016, 0.8 percent during the first quarter of 2017, and is forecast to decline by 0.2 percent in the second quarter this year, the firm said.

Notice how the gap completely shifted starting from 2013.

The latest hike in Amazon’s share price is “becoming large enough to make an impact,” Sanderson wrote. “This [trend] does not end well for traditional retailers and many will go the way of Borders and Circuit City, leaders in the first two large categories disrupted by Amazon.com.”

Sanderson states simply that Amazon is the “best long-term growth story available to investors today”

With an Amazon-Whole Foods deal in the making, pressure is about to hit traditional grocers head-on, as an internet giant takes on the “high-frequency” fresh foods market, MKM Partners added. “[P]ressures on traditional retailers will only get worse.”

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Is Google Concerned About Amazon Eating Their Lunch?

Leveling The Playing Field

When monopolies state that they want to “level the playing field” it should be cause for concern.

Groupon is a great example of how this works. After they turned down Google’s buyout offer, Google responded by…

The same deal is slowly progressing in the cell phone market: “we are using compatibility as a club to make them do things we want.”

Leveling Shopping Search

Ahead of the Penguin update Google claimed that they wanted to “level the playing field.” Now that Google shopping has converted into a pay-to-play format & Amazon.com has opted out of participation, Google once again claims that they want to “level the playing field”:

“We are trying to provide a level playing field for retailers,” [Google’s VP of Shopping Sameer Samat] said, adding that there are some companies that have managed to do both tech and retail well. “How’s the rest of the retail world going to hit that bar?”

This quote is particularly disingenuous. For years you could win in search with a niche site by being more focused, having higher quality content & more in-depth reviews. But now even some fairly large sites are getting flushed down the ranking toilet while the biggest sites that syndicate their data displace them (see this graph for an example, as Pricegrabber is the primary source for Yahoo! Shopping).

How Google Drives Businesses to Amazon, eBay & Other Platforms

Google has spent much of the past couple years scrubbing smaller ecommerce sites off the web via the Panda & Penguin updates. Now if small online merchants want an opportunity to engage in Google’s search ecosystem they have a couple options:

  • Ignore it: flat out ignore search until they build a huge brand (it’s worth noting that branding is a higher level function & deep brand investment is too cost intensive for many small niche businesses)
  • Join The Circus: jump through an endless series of hoops, minimizing their product pages & re-configuring their shopping cart
  • PPC: operate at or slightly above the level of a non-functional thin phishing website & pay Google by the click via their new paid inclusion program
  • Ride on a 3rd Party Platform: sell on one of the larger platforms that Google is biasing their algorithms toward & hope that the platform doesn’t cut you out of the loop.

Ignoring search isn’t a lasting option, some of the PPC costs won’t back out for smaller businesses that lack a broad catalog to do repeat sales against to lift lifetime customer value, SEO is getting prohibitively expensive & uncertain. Of these options, a good number of small online merchants are now choosing #4.

Operating an ecommerce store is hard. You have to deal with…

  • sourcing & managing inventory
  • managing employees
  • technical / software issues
  • content creation
  • marketing
  • credit card fraud
  • customer service
  • shipping

Some services help to minimize the pain in many of these areas, but just like people do showrooming offline many also do it online. And one of the biggest incremental costs added to ecommerce over the past couple years has been SEO.

Google’s Barrier to Entry Destroys the Diversity of Online Businesses

How are the smaller merchants to compete with larger ones? Well, for starters, there are some obvious points of influence in the market that Google could address…

  • time spent worrying about Penguin or Panda is time that is not spent on differentiating your offering or building new products & services
  • time spent modifying the source code of your shopping cart to minimize pagecount & consolidate products (and various other “learn PHP on the side” work) is not spent on creating more in-depth editorial
  • time switching carts to one that has the newly needed features (for GoogleBot and ONLY GoogleBot) & aligning your redirects is not spent on outreach and media relations
  • time spent disavowing links that a competitor built into your site is not spent on building new partnerships & other distribution channels outside of search

Ecosystem instability taxes small businesses more than larger ones as they…

The presumption that size = quality is false. A fact which Google only recognizes when it hits their own bottom line.

Anybody Could Have Saw This Coming

About a half-year ago we had a blog post about ‘Branding & The Cycle‘ which stated:

algorithmically brand emphasis will peak in the next year or two as Google comes to appreciate that they have excessively consolidated some markets and made it too hard for themselves to break into those markets. (Recall how Google came up with their QDF algorithm only *after* Google Finance wasn’t able to rank). At that point in time Google will push their own verticals more aggressively & launch some aggressive public relations campaigns about helping small businesses succeed online.

Since that point in time Amazon has made so many great moves to combat Google:

All of that is on top of creating the Kindle Fire, gaining content streaming deals & their existing strong positions in books and e-commerce.

It is unsurprising to see Google mentioning the need to “level the playing field.” They realize that Amazon benefits from many of the same network effects that Google does & now that Amazon is leveraging their position atop e-commerce to get into the online ads game, Google feels the need to mix things up.

If Google was worried about book searches happening on Amazon, how much more worried might they be about a distributed ad network built on Amazon’s data?

Said IgnitionOne CEO Will Margiloff: “I’ve always believed that the best data is conversion data. Who has more conversion data in e-commerce than Amazon?”

“The truth is that they have a singular amount of data that nobody else can touch,” said Jonathan Adams, iCrossing’s U.S. media lead. “Search behavior is not the same as conversion data. These guys have been watching you buy things for … years.”

Amazon also has an opportunity to shift up the funnel, to go after demand-generation ad budgets (i.e. branding dollars) by using its audience data to package targeting segments. It’s easy to imagine these segments as hybrids of Google’s intent-based audience pools and Facebook’s interest-based ones.

Google is in a sticky spot with product search. As they aim to increase monetization by displacing the organic result set they also lose what differentiates them from other online shopping options. If they just list big box then users will learn to pick their favorite and cut Google out of the loop. Many shoppers have been trained to start at Amazon.com even before Google began polluting their results with paid inclusion:

Research firm Forrester reported that 30 percent of U.S. online shoppers in the third quarter began researching their purchase on Amazon.com, compared with 13 percent who started on a search engine such as Google – a reversal from two years earlier when search engines were more popular starting points.

Who will Google partner with in their attempt to disrupt Amazon? Smaller businesses, larger corporations, or a mix of both? Can they succeed? Thoughts?

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Firefox: Improving privacy and eating analytics data for breakfast

Author (displayed on the page): 

The search query data that analytics provides has been invaluable to SEOs for a number of years, and a fair fuss was kicked up when Google introduced hidden search queries in October 2011. Since then, there have been a couple of developments …

Mozilla’s Firefox has become one of the more popular browsers on the planet in recent years with around 20% of the market share (depending on who you ask). Like many browsers (certainly the popular ones), Firefox offers a search bar already baked in, which along with the huge developer community around it developing fantastic tools  and add-ons makes it a very flexible browser to use.

The news from Mozilla’s privacy blog earlier this week that searches made in Firefox’s search bar or in the ‘Awesome Bar’ will now be hidden from analytics’ users is good for web privacy campaigners, but not so great for those who rely on keyword data coming into Google Analytics, or, for that matter, any other analytics tool.

It’s well worth remembering that Google have funded much of Mozilla’s development of Firefox, and there are murmurs that Mozilla may lose that funding, so there is some speculation that this may be the spur for their shift to Google’s way of thinking on hiding search queries from website owners.

We’ve already seen the curse of “(not provided)” in our keyword data since Google started hiding searches made by signed-in Google users (to varying degrees):

keyword not provided by Google Analytics

For some companies the impact has been far greater than for others: up to a third for some sites. Wordtracker’s own (not provided) data is rising and doesn’t show any sign of slowing down.

progression of 'not provided' keywords

This figure looks set to rise dramatically in the near future, as Firefox’s update means that they’ll be sending all search queries to Google via https (which means along a secured route), which in turn means that any visits to your site from a Google search from Firefox’s search bar will be reported as (not provided) rather than giving the search query to you in your analytics.

What does this mean for SEOs?

What this means for SEOs struggling to find the best keywords is that they'll have to start to find a new way to establish their best target keywords – in the absence of search query reporting in Google Analytics, this means more A/B testing, deeper keyword research in the beginning, and hacking analytics data even more than at present. Avinash Kaushik published a method for analyzing the (not provided) data which is handy for those comfortable with customizing dashboards (there are some good dashboard resources around)

There is keyword data available in Webmaster Tools, but the general feeling is that this data is loose and inaccurate, so perhaps it’s time for SEOs to find other ways to make sure they’re targeting useful keywords and not stabbing in the dark. Of course, keyword research is going to be as important as it ever was, and keyword-heavy offline campaigns for larger organizations (in the UK think of the ‘search for “Army Jobs”‘ TV adverts the military have been running for some years, or Orange’s ‘search online for “I Am”‘ campaigns) may start to play a larger role in corporate site promotion.

Why are Google encouraging this?

There are bound to be theorists writing about Google’s strategy with this – are they trying to increase AdWords revenue (PPC search terms are still reported in Analytics)? Are they trying to clean up their privacy mojo in the wake of the Street View cars debacle? Are they just collecting as much data as possible for their own purposes? Are they planning to get people to move to a paid version of Google Analytics?

There’s a saying which goes “If the product is free, you are the product”. We’re seeing increasing evidence of this with things like Facebook sharing our data with developers and marketeers when we ‘like’ their pages or use their apps. Analytics data has always been provided for free, and while we still have access to huge amounts of (reasonably accurate) data, I don’t think we should be too surprised when this free information ends up being curtailed in one way or another, stinging though it may.

Google clearly has interests in a ‘better internet’ for users, and is concerning itself (publicly at least) with fashionable (but nonetheless very real) privacy concerns, but its real motives are going to remain hidden from us, at least for the foreseeable future.

Why do you think Firefox has taken this route? How do you feel about the way search data is treated in analytics? Share your thoughts, let us know your view. Leave a comment: join the discussion.

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