The Amazon Seller's Week in Review, February 13th, 2017

In this Amazon Seller's Week in Review, Julie Spear, our Operations Manager, shares her take on recent news highlights and what these could mean for brands selling on the Amazon marketplace. 

 

1. Alexa: The Key Factor to Expanding Amazon’s Foothold in Music Streaming?

Last week we discussed Walmart’s bold move to take on Amazon Prime with its offer of free shipping, no membership required.  Would this move have a significant impact on Amazon? And how many Amazon Prime members take advantage of its features beyond free 2-day shipping?  Discussion of Amazon’s music streaming services, and Alexa’s potential role in its growth, brought to light an interesting statistic that indicates the streaming (both video and music) features of a Prime membership are likely value-adds to customers that will continue to set Amazon apart from Walmart.com.  

A recent Parks Associates study indicates that Amazon's Prime Music service subscriptions grew by 50% in 2016. Alexa could be the key factor to help that number grow even further throughout 2017.

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During the fall of 2016, Amazon launched a subscription streaming service: Amazon Music Unlimited.  While this service is at an additional cost to Amazon Prime Music, it includes a significantly expanded catalog of songs, aiming to compete with the likes of Spotify and Apple Music.  Last week, Jeff Bezos and Steve Boom, president of Amazon Music, touted the beauty of integrating Alexa with Amazon Music Unlimited.   

No need to scroll through playlists or libraries of music - just tell Alexa what you want to hear and she’ll do all of the work, in a fraction of the time. Alexa makes the process of selecting and listening to your music effortless, and as Bezos said, “If you make things easier, people do more of it."

Steve Boom further expanded on the value of Alexa in Amazon’s quest to gain even more traction in the music streaming business, “If you’re asking people to pay for streaming music in a world where there are a lot of free alternatives, then you need to build a service that they want to use every day.  And that’s one of the beauties of this device.”

    

2. 33 Million Users of Pay with Amazon

One year ago, Amazon reported 23 million users of its Pay with Amazon service, a service that enables customers to store their payment data in their accounts, making the checkout process quick and easy.  Last week, Amazon reported an increase of 10 million users, bringing the number to 33 million.  The growth could likely be attributed to the service’s expansion to France, Italy and Spain as well as Amazon’s brick-and-mortar bookstores last year.   So what does this year over year growth say about the talks between PayPal and Amazon?  According to reports a couple weeks ago, PayPal CEO, Dan Schulman, shared they have been “in talks” with Amazon to add PayPal as a payment option on the e-commerce site.  Amazon continues to decline comment on these conversations.  

 

3. Could FedEx be the New FBA?

While Amazon has been working to streamline the logistics of delivering customer orders, one of their current shipping partners has been developing a fulfillment program aimed at supporting small to medium sized e-commerce companies.  Last week FedEx rolled out FedEx Fulfillment, a program that includes warehousing products, packaging and delivering customer orders.  Taking product returns is an added feature to FedEx’s new offering.  While it remains to be seen if this is a more cost effective solution over FBA for some sellers, it could be an option worth consideration.  That said, sellers electing this route would lose the coveted Prime Eligible badge on their product pages and we all know how significantly Prime eligibility can impact both traffic and conversion rates.

 

Until next week's round of Amazon Seller's Week in Review, join us in our private community for brand owners and Channel Managers on Facebook: Amazon Chanel Mastery for Brands. We share insider tips about e-commerce and selling on Amazon. This is where you can get to know us, and your peers, a little better.