Gear Up Online Retailers!

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The Holidays Are Here!

Let the insanity begin. The end of year craze is coming and it is promising the usual explosion in retail activity over the internet. With November almost here, it is certainly time for these companies to finish their preparations and to set their holiday campaigns in motion. One has to wonder how retailers like Target, Best Buy and Wal-mart are getting ready for the increase in online activity. Compete data shows the historical explosions of activity in these sites:

According to this graph, we should anticipate to see a 20% – 50%+  increase in unique visitors to these websites in November and a plateau until resuming average traffic in January of 2012.  The impact from the two months of November and December will play a crucial role in the yearly success of each of the retailers.

With Black Friday just around the corner, which companies will rise to the top and which will crumble during these tumultuous and defining months?  How will these brick and mortar retailers convert their online traffic into successful sales?

One retail company that is sure to take advantage of the holiday season is Amazon.com.  Traditionally, the site has seen extremely high increases in traffic during the time surrounding the holiday season.  The online superpower is sure to capitalize on the market again this year.  Even the mammoth retailer Wal-mart doesn’t seem to be able to touch Amazon’s online domination of the holiday season.  Last year, Amazon peaked with a whopping 4.8 billion page visits, more than double that of Wal-mart.  Will the gap widen further this year?

It is interesting to see how Amazon has only one peak during the holidays and that the brick and mortar retailers tend to have a two peak growth pattern.  This is most likely due to the buzz and campaigns created around Black Friday.  Amazon’s steady increase and decrease in page views is probably due to the fact that shoppers can buy products online all year around, and not just during Black Friday events.  Amazon also advertises to the entire holiday season and boasts proudly that they have deals “all day, every day”.  They are campaigning to the entire holiday season, not limiting themselves to the timeframes that constrict concrete retail stores.

Target has a different holiday strategy; they are attempting to preserve the family time of Thanksgiving by waiting to launch their Ad campaigns until after the third Thursday of November.  Best Buy has yet a different strategy and is launching their massive advertising campaigns in mere days.  We will have to wait for the end of the holidays to see the results of this year’s campaigns and to see if Amazon can continue to dominate the online marketplace this season.  Only time will tell.

What is Amazon is doing right?

If we take a closer look at Amazon.com, it becomes obvious that they are gaining large amounts of online traffic from their competition.  Amazon has increasing incoming traffic from both Wal-mart and Target, meaning that they are increasing their online market share against these opponents.  I have exported the incoming traffic from the Amazon.com to display how Amazon is “stealing” traffic from competitive sites.  As the data shows, Amazon is increasing its incoming traffic from many of its main competitors in the month of September.

 
Industry Category
Visits
+/-
+/- (%)
Incoming Share (%)
Change in Share
Grouped Site
craigslist.orgAuction Sites and Classifieds1271368581644.79%0.47%2.62%
ebay.comAuction Sites and Classifieds5465564553851.02%2.04%-1.07%
buycheapr.comShopping Search7861337339010.30%0.29%8.02%
target.comMass Merchant and Department Store438322188044.48%0.16%2.31%
overstock.comMass Merchant and Department Store347039211406.49%0.13%4.26%
we-care.comMass Merchant and Department Store6150027680314.27%0.23%11.88%
apple.comElectronics2696574114618.01%0.10%15.61%
walmart.comMass Merchant and Department Store8243368723111.83%0.31%9.53%
buy.comMass Merchant and Department Store1417183310130.48%0.05%27.78%

People are leaving Target’s, Wal-mart’s, Macy’s, and even Apple’s sites to shop and compare products on Amazon.  The online retailers are losing ground to Amazon as well; ebay.com, overstock.com and buy.com are struggling to compete.  September was definitely an explosive month for Amazon, but will they continue to take over the marketplace during the holidays?  It certainly seems as though the company will have the power to do so.

Sizing Up the Competition

Although Amazon.com is increasing its online traffic from competitive sites, there are still competitors that seem to be counteracting the initiatives of the retail giant.

Outgoing traffic from Amazon.com (filtered, exported, and graphed) reveals that Best Buy is gaining market share, as .21% of Amazon’s September traffic left to go to Bestbuy.com, a growth of 1.76% since August. Who’s gaining the most traction against Amazon? Surprisingly, a much smaller scale retailer, we-care.com, is directly receiving .7% of Amazon’s traffic, .5% more than Best Buy, and an increase of 23% since last month! Shoppers at we-care.com choose which retailer to buy from and which organization they want a cut of the profits to go to. Though someone might be purchasing from Amazon.com, there are over 2,000 retailers hosted on we-care.com.  From Compete data can see that we-care.com is increasing both the incoming traffic of Amazon and the reception of outgoing traffic from Amazon meaning the site is probably a direct competitor.

One has to applaud both of these sites for competing with the one-stop-shop solution that Amazon provides its customers.  This is, however, only the calm before the storm of November and December.  Retailers are poised to capitalize on the enormous increases in online traffic.  Who will be on top after the New Year?  Stay tuned to hear from our Compete Retail team as they reveal various holiday studies over the coming weeks.  Let the retail madness begin!

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About Elliot Telford:
Elliot Telford is the Product Manager for the Compete API and Compete PRO International. As a Product Manager, Elliot focuses on user experience, user research, and user centric product enhancements. After many months of client support for Compete PRO, Elliot has moved into the product space to continue to improve experiences for his clients on a higher level. As the API Product Owner, Elliot is constantly looking for ways to create and improve integrations to provide more value to customers with Compete’s best-in-industry data. Connect with Elliot on Twitter @ElliotTelford