Big 4 Sites Control Future Of E-commerce
by Gavin O’Malley,
Amazon-BB2One could argue that Google, Amazon, Apple, and Facebook now control the fate of online commerce, per a new Forrester report. Online retailers’ success rests largely on the skill with which they can navigate this new reality.
Indeed, the Big 4 are “increasingly viewed as the gateways to Internet traffic,” according to Forrester principal analyst Sucharita Mulpuru.
Nearly half of all online shoppers start their research process on Amazon or a search engine, i.e., Google; 47% and 43% of the world’s Web traffic visits Google and Facebook daily; 21% of iPhone owners and 49% of iPad owners purchase physical products on these devices.
Plus, 47% of online shoppers agree that friends’ social media (i.e., Facebook) posts and “likes” are helpful in discovering new brands, trends, and retailers.
Given such omnipotence, “their impact on eBusiness ranges from interesting and innocuous forays into commerce to disruptive forces that must be approached with circumspection,” Mulpuru says of Google, Amazon, Apple and Facebook.
Likely falling into the latter category, the Big 4 have steadily reached beyond their core businesses of technology products and services to other verticals, such as travel (as with Google’s acquisition of ITA Software); financial services (Google, Facebook, Apple); retail (illustrated by Apple’s iTunes music store and its physical retail stores); and consumer electronics manufacturing (as with Amazon’s e-readers and tablets).
Regarding Google, Mulpuru warns: “EBusiness professionals will need to keep the company top of mind because it maintains a majority share of online marketing spend but promises to transform every industry from financial services to travel to health care and retail.”
Amazon — despite possessing the smallest market cap of the four players — is completely changing the dynamics of manufacturers and distributors, according to Mulpuru.
Facebook, meanwhile, is seen as more akin to television than to traditional interactive marketing, and seems to work best when building awareness and driving “top of funnel” activity, much of which is not where interactive marketers focus their budgets.
Moreover, “these companies are also the gateways to other companies’ Web sites and are therefore critical in the product research and sales funnel,” Mulpuru notes.
That said, Mulpuru is confident that savvy e-business professionals can learn from The Big 4, anticipate their strategies, and ultimately thrive in the ecosystems they shape.
Going forward, she suggests “cautious observation of the moves of the four players and carefully thought-through partnerships. At the very least, every eBusiness executive should have an in-house expert or agency that is intimately familiar with the road maps and investments of these players.”