Amazon, a threat to nearly all UK retailers, is now the fifth biggest player in UK retail as its gross market value continued to rise at a rapid pace with over £4 in every £100 spent on retail in 2017 going via the online giant.
Amazon is soaring up the ranks of UK retail with the online behemoth only held off the top spot by the big four grocers in 2017. Its dominance in the retail market considering it primarily sells non-essential items in comparison to the grocers who benefit from selling indispensable, everyday goods, and that it does not have any physical stores in the UK, is evidence of how Amazon has continually innovated and succeeded in meeting consumer needs, in terms of both product range and shopping experience.
The online pureplay continues to far outstrip growth in the UK online channel with Amazon’s gross market value estimated to have risen by 22.5% in 2017 in comparison to total online spend rising 8.4%, highlighting that it is stealing share from its UK competitors – it is forecast to have accounted for 33.5% of all UK spend online in 2017 versus 29.6% in 2016. Given Amazon’s phenomenal performance and the limited growth forecast in retail spend over the next five years, it is no surprise that retailers are eager to get on board in an attempt to drive incremental sales via a new sales channel. However, it is imperative that retailers continue to give shoppers a reason to visit and purchase from their own sites, such as exclusive products or loyalty rewards, to bank maximum profits and cement their place in the market.