Much has been made of shoppers’ changing behavior during the holiday selling season. Driven by fallout from the COVID-19 pandemic, the shift away from brick-and-mortar stores toward e-commerce has accelerated significantly. Adobe Analytics reports that online sales set records on Thanksgiving, Black Friday and Cyber Monday, rising some 22% on the first two days and 15.1% on the last. Cyber Monday volume of $10.8 billion made it the biggest day for e-commerce ever in the U.S. Concurrently, sales and foot traffic at traditional stores declined.
While it’s no surprise that Amazon came out on top in the battle for online sales, the company may have reached a new milestone in its assault on the broader retail market. From Thanksgiving through the following Sunday, Numerator found that Amazon had the top market share, accounting for 19% of total spending, up from 11.7% the prior year. Overall, online volume jumped to 38% of retail sales from 24% in 2019.
The rise of Amazon is no accident. Since founding the company, Jeff Bezos has been steadfast in his vision of thinking big, adhering to high standards, and starting with the customer and working backwards to develop innovative solutions. That philosophy has enabled Amazon to expand from selling books to embrace the gamut of CPG products.
Additional evidence of Amazon’s unbounded ambition, if any were needed, emerged last month when the company announced its long-awaited entry into the prescription drug market. The usual obsession with detail is evident in the launch, which pairs the online Amazon Pharmacy store and an option for Prime members to realize substantial savings when purchasing medications, either online or at 50,000 participating brick-and-mortar pharmacies. With its commitment to continuous innovation, it’s hard to see how Amazon will be dislodged as the e-commerce leader in the U.S.
That’s not to say that Amazon doesn’t have serious competition as the world’s preeminent online merchant. Alibaba, a Hangzhou, China-based company intent on constructing the future infrastructure for commerce, is wracking up sales that even Amazon might envy. Take, for example, Alibaba’s 11.11 Global Shopping Festival. Held over 11 days at the beginning of November, the event, also known as Singles Day, generated $74.1 billion in 2020, more than Thanksgiving weekend and Cyber Monday combined. Those results, together with Alibaba’s edge in such fields as social commerce, make it a formidable rival for Amazon. Expect a pitched battle between the two companies when Alibaba moves, as it surely will, into the U.S. consumer market.