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Sticking to the eCommerce Sandbox

Say it aint so!  Amazon is about to join the dark side and open a bricks and mortar retail store.

After years of gargantuan losses, Amazon is now the biggest and wealthiest eCommerce website in the world. Once the biggest online bookstore it’s now the biggest online every store offering a vast array of products for sale from cotton buds to garden fertiliser to Gone Girl DVDs. With a $US74billion annual turnover, Amazon’s founder Jeff Bezos clearly knows what he’s doing.

Being a publicly listed company, shareholders want increasing returns so there’s an unending drive for greater profits. The whiteboard thinking is pretty clear: “Guys, eCommerce is only 6.4% of total retail sales (in the US) so we’re missing out on 93.6% of the market. How about we…”

As we were talking about numbers, here’s a number that possibly caught the eye of Amazon executives: $US476billion. That was the 2014 turnover of bricks and mortar retail behemoth Walmart.

So many brands, searching for new ways to leverage their brand name recognition have found out that not sticking to what they’re known for is a recipe for disaster. Book retailer Barnes & Noble found that out the hard way when they tried to take on a pipsqueak new website called Amazon some years ago.

Why try to play in someone else’s sandbox when the one you own has an infinitely greater potential for growth than anyone else’s? Extrapolate that $74billion turnover for the day that eCommerce accounts for 50% of retail sales. That should keep the shareholders smiling.


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Images Courtesy: www.amazon.com and teoblog.net


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