As intimidating as it may be to separate from Amazon, brands in the ecommerce space would benefit from making the call at some point, experts advise. The arrival of headless commerce concepts will allow leaders more innovation in how they create and invigorate their digital assets.
First, the figures on Amazon’s growth and reach are mind-boggling: its profits in the year since the pandemic started exceeded $26 billion, more than the previous three years combined.
It dominates a very busy sector, thanks to how its breadth of products and quick delivery has elevated it to a pole position: Its share of US ecommerce sales will surge from 39.8% in 2020 to 40.4% in 2021, which will be the top company seeing that kind of growth.
As for Amazon’s key consumer categories, the two verticals where the Seattle company enjoys the majority of US ecommerce sales are books/music/video (83.2% of all US ecommerce sales in 2021) and computer/consumer electronics (50.2%).
The next time you see that brown box hooked under the arm of a delivery person strolling the street, remember this hard-hitting statistic based on projections by research firm PYMNTS: Amazon will outgrow Walmart by more than a three-to-one margin through 2025, adding $315 billion in additional sales, or roughly 75% more than today’s revenue.
What makes Amazon such a market leader in ecommerce? A report noted how it boasts an array of business drivers, such as: loyalty program Amazon Prime, which promises one-day shipping and a robust streaming service; the vast haul of data that it gathers from consumers; a massive marketing budget far exceeding the ecommerce revenue generated by all but three U.S. merchants; and its online marketplace, which allows the retailer to expand its online selection by millions of SKUs that Amazon doesn’t have to buy or warehouse.
“Amazon is really good at trying something, iterating on that project and then if it doesn’t work, they shut it down or if it does work, they scale it up and that’s what gave rise to Amazon Web Services, Prime, and their fulfillment success,” says Kelly Goetsch, Chief Product Officer at commercetools, in an interview with Bold Commerce.
The headless commerce edge to compete beyond Amazon
Why not use Amazon’s own arsenal against it? After all, Amazon has decoupled its backend architecture to offer a seamless shopping experience to its Prime members across desktop, mobile, and voice.
Brands seeking to compete in their sector without relying on Amazon are “focused on facets such as the user experience and providing the same frictionless experience that Amazon tries to deliver,” says Joel Farquhar, VP of Pivotree, in an interview with Bold Commerce. “Many businesses are trying to compete on the fulfillment side and some are getting much better at it and being able to deliver very quickly.”
When retailers act like software companies, as Amazon has done expertly, that competitive advantage can be very valuable, says Goetsch. “Microservices [from headless commerce approaches] really enable brands to compete against Amazon by allowing for that innovation, that experimentation that Amazon has been doing.”
It may be tempting for businesses to embrace Amazon but , by doing so, you could be bypassing the opportunity to get closer to your customer—to provide value added content or services, to build community, and deepen relationships.
“It’s time for brands on Amazon to really start owning their business, and building long-term relationships with the customer. And a huge part of that starts with building their own platforms or ecommerce solutions,” says Yvan Boisjoli, co-founder and CEO of Bold Commerce.