It’s become difficult to name a consumer sector that Amazon.com has left untouched.
Get ready to cross video games off the list.
Earlier this week, London’s Telegraph reported that the US online retail giant is set to develop its own computer games, pitting the company against the likes of Nintendo and Electronic Arts.1
Amazon has already made baby steps into the industry, producing a game called Air Patriots and buying California gaming company Double Helix, both moves ahead of the company’s plan to release its own game console.
As the Telegraph noted, the strategy by Amazon is similar to what it did with the Kindle e-book reader – that is, the hardware (in this case, the console) is the “bait” that ultimately closes off the virtual circle of having users buy all of their related video games from Amazon.
That Amazon can even consider this type of leverage is both a testament to the company’s grow-at-any-cost strategy dovetailing with the rampant growth of online retail shopping by consumers.
And, in a rich-get-richer scenario that might be playing out, the strength of many of e-commerce’s top players seems to be holding up even as more consumers access shopping via mobile devices.
As Barron’s pointed out last week, a Cantor Fitzgerald analyst noted that mobile date usage from January showed a healthy growth in smartphone use from customers of many of the big ecommerce players.2
Amazon, for example, saw a 27% pick-up in monthly unique visitors in smartphone traffic in January, which represented an improvement from the 22% rise in traffic during last year’s fourth quarter. In addition, about 52% of Amazon’s total unique visitors in January also used a mobile device to access the site, with approximately one-third of the total unique visitors accessing the site exclusively through a mobile device, “attesting to the growing importance of this channel for the company.”
Similarly, eBay saw 24% growth in monthly unique visitors via smartphones in January, with 59% also using a mobile device to visit the site, and 29% of the unique visitors exclusively using a mobile device to visit.
Shares of Amazon and eBay make up 36% of the weighting in the Couch Commerce motif, which has gained 4.6% in the past month. The S&P 500 is up 2.8% in that same time.
Over the past 12 months, the motif has increased 48.8%. The S&P 500 has risen 22.9% in that timeframe.
While the current state of overall retail sales is difficult to discern due to the impact of a harsh winter, evidence continues to confirm that a growing percentage of transactions are taking place via the web-enabled phone, tablet or computer.3
1Katherine Rushton, “Amazon to develop its own computer games,” telegraph.co.uk, March 9, 2014, http://www.telegraph.co.uk/technology/amazon/10686685/Amazon-to-develop-its-own-computer-games.html, (accessed March 12, 2014).
2Teresa Rivas, “Growing Mobile Usage Bodes Well for Social Media, Ecommerce Names, barrons.com, March 3, 2014.
3NRF Foundation’s Retail Insight Center, http://research.nrffoundation.com/Default.aspx?pg=46.