Source: Amazon
It’s not just a small tweak in the algorithm; it’s a massive revenue stream and a significant blow to Walmart, which positions itself as a credible second option for e-commerce.
Ben Watson
Co-Founder
9Bar Commerce Consultancy
Amazon's latest move to direct search results to outside websites marks a dramatic turning point in how people search and shop. The move aims to diversify search results by guiding users to external retailers' websites, offering the e-commerce giant a wealth of new data to optimize its platform. Data in hand, Amazon stands to deepen its moat and take risks no other retailer can take.
Ben Watson, Co-Founder of 9Bar Commerce Consultancy, an independent commerce consultancy helping D2C brands become market leaders, weighs in on the potential impact of Amazon’s move towards owning all of e-commerce search.
Amazon Prime moat: "Amazon's always been great at trying new things and testing things, and very few of them scale or become real. But that's okay because they've got the audience, they've got the people who are okay with that sort of testing going on. With the luxury of Amazon Prime's vast reach, its provided them a moat, and people are willing to tolerate a lot. When they do scale, it can really have a big impact on everyone," Watson says.
Cost benefit: By driving search traffic to external sites, Amazon is not just changing the search experience but gathering valuable new data in the process. At the heart of this move is the potential to unlock even more insight into consumer behavior. Watson notes, "Amazon's going to do the numbers and the data, and they're going to understand what's the cost benefit, what's the benefit to revenue versus people who jump off the site? This is core to Amazon—something we often forget: their goal is to convert a customer to a sale as quickly as possible.”
Amazon’s always been great at trying new things and testing things, and very few of them scale or become real. But that’s okay because they’ve got the audience, they’ve got the people who are okay with that sort of testing going on.
Ben Watson
Co-Founder
9Bar Commerce Consultancy
Overtaking the runner up: The data from external websites, especially competitors posing the greatest threat like Walmart, could be transformative for e-commerce as a whole. Watson highlights the long-term opportunity: “What’s being overlooked here is what happens when Amazon gains confidence in the impact of their advertising on Walmart's sales. Likely via a third-party sales aggregator. At that point Amazon can start offering advertising which if not directing to Walmart.com at least provides confidence that a percentage of that Amazon spend is spilling over and driving sales on Walmart.com. That’s the real game—Amazon's next big growth. It’s not just a small tweak in the algorithm; it’s a massive revenue stream and a significant blow to Walmart, which positions itself as a credible second option for e-commerce advertising.”
Testing things out: The real question, however, lies in the numbers. As Watson points out, Amazon's ultimate goal is to convert visitors into sales as quickly as possible, so any additional steps or detours in the user experience could hurt conversion rates. "Their job is to minimize that extra clicking," Watson explains. "So I think they're going to test this thing, see if it pays out. I believe there’s a bigger play here: What if Amazon can crack another major retailer, handle fulfillment, and sell on their platform—potentially outside the traditional Amazon results?”
A secret future: Looking holistically at Amazon’s latest move, Watson concludes, "They're always working at this and it's a really, really good business model. So I'm fascinated to see what comes out of it." The results of this experiment are likely to remain shrouded in secrecy, as Amazon's tendency is to use insights internally to drive its next big move. One thing, however, is certain: the move to own buyer search marks a pivotal moment for every e-commerce retailer.