The pandemic was unkind to many businesses, but others saw it as an opportunity to fine-tune their e-commerce business.
Take Amazon. It saw a surge in revenues and profits during 2020 and 2021 — up 220% at one point — and has managed to maintain double-digit growth in its e-commerce sector each year since.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵
While e-commerce still accounts for a small minority of overall retail revenues (around 16% in 2024, according to the U.S. Department of Commerce), there are a few dominant players.)
Walmart, Target, and eBay are a few of them. But the uncontested leader is Amazon, which commands nearly 40% of the market, according to Statista. In fact, the other nine of the top 10 retailers combined add up to barely 22% of the market.
Historically Amazon has preferred to keep customers inside of its ecosystem, a “walled garden,” as it’s known in the tech world.
Amazon is the dominant e-commerce platform, accounting for around 40% of revenue in the sector.
Image source: picture alliance/Getty Images
How ‘walled gardens’ benefit tech companies
In general, keeping customers inside an ecosystem gives a company more control over their experiences. By the way, Amazon is not alone in this practice. Plenty of other companies do the same thing, including Apple, X, and Facebook, to name a few.
In the case of Amazon, the walled garden structure gives the company total control over what users can see and do on their sites. It controls the advertising that can be shown on its site, and it controls all the data it collects.
Related: Nordstrom makes change sure to anger customers
Amazon is able collect data about customers’ shopping habits and product preferences and then target them with ads and special offers.
It all gives Amazon a competitive advantage that has helped it remain the dominant player in the e-commerce space.
Despite Amazon’s dominance, some brands have chosen not to make their products available on the platform. Now Amazon is testing how it can make some of these products available via its platform anyway.
Amazon testing a way for customers to ‘shop directly’ from brands
Amazon recently revealed it is testing a new feature called “Buy for Me” among a subset of users in the Amazon Shopping app.
The feature, which is currently in beta, “helps customers discover and seamlessly purchase select products from other brands’ sites if those items are not currently sold in Amazon’s store,” according to a company announcement.
Amazon is testing a limited number of brand stores and products. It plans to roll out to more customers and expand offerings based on feedback.
Related: As many department stores close, this chain adds new locations
Customers who currently have access to the feature can search for specific brands in the Amazon Shopping app, and in some cases they’ll see relevant results from Amazon and third-party sellers. They might also be shown additional products from other stores in a separate section of search results labeled “Shop brand sites directly.”
Customers can link directly to these sites, or in some cases, customers will see a link to Buy for Me.
More on retail and bankruptcy:
Walmart store closing, auctioning off laptops and flat screen TVs Home Depot CEO sounds the alarm on a growing problem Famous restaurant files for Chapter 11 bankruptcy
Amazon says it is not charging brands a commission for these transactions.
“We’re always working to invent new ways to make shopping even more convenient, and we’ve created Buy For Me to help customers quickly and easily find and buy products from other brand stores if we don’t currently sell those items in our store,” said Amazon Shopping Director Oliver Messenger.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
