Thursday, January 15, 2009

Traffic jam or a new take on search?

With the Holiday season now concluded, I thought it would be interesting to reflect on the 220mm unique individuals (per Compete.com) that visited Walmart.com, Amazon.com and Ebay.com (Craigslist would have added another 40mm). With the notable exception of Walmart, it seems as if the commerce segment of the industry is heading towards a 'walled-garden' approach to the shopping experience; though far different from the failed AOL interpretation from a bygone century. Rather than forcefully inhibiting consumers from leaving, they are offering an open buying experience that is adding tremendous value by keeping visitors 'in-network'.

At Craigslist, Amazon and Ebay a large % of sales are consummated by affiliates, and the transaction, though seamless from a consumers perspective, is not handled by the named site. In essence, the value-add trend for these commerce players (excepting Walmart) is to really be a commerce portal; similar to water and gravity, attract traffic in, and let it find its own level.

The buying experience at Walmart for, say a tennis racquet, is far different (and less rewarding) than at Amazon. At Amazon, the featured racquet is shipped and sold by Midwest Sports, in-context advertisements (affiliates) selling the same product are displayed and links to 'similar items by category' also drives more affiliate sales without ever leaving the Amazon site.

These sites offer critical two way value. Even a franchise as mighty as Walmart can never approach the the deep selection and pricing options that 'open' commerce sites offer. Site affiliates live by the qualified traffic referrals generated by the host sites. As expected, as you go more 'vertical' the search results get even better. It will be interesting if successful, though still nascent sites such as Etsy, follow an Amazon or a Walmart path.

At its foundation, Amazon and its ilk are really bringing commerce oriented search to a level where a key word or phrase (tennis racquet) brings a myriad of in-context sites that readily serve its customer base. Moreover, unlike Google's model, where a cottage industry has been built around scamming the search (SEO) and Adwords (click fraud) results , the integrity of commerce based search, based on broad affiliate relationships, seems to have potential benefits that are deeper than information searches.

3 comments:

  1. Very, very nice.
    WalMart, Costco have the logistics and the stores. Amazon, et al don't have the overhead. Go to WalMart or Costco, get it now. Amazon get it close to now. Both sustainable. Just different strokes for different folks.

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  2. Excellent article. Very interesting to read. I really love to read such a nice article. Thanks! keep rocking. strategy

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