my earlier report on the way that Amazon’s business is evolving, here’s some fresh meat for the thesis in the shape of a Business Insider article quoting Morgan Stanley analysis on the proportion of mobile e-commerce traffic going through dedicated apps rather than through online search – meaning chiefly Google. I’ve been unable to track down the original Morgan Stanley report so far, but the gist is there on Business Insider, and determines that almost 60 percent of Amazon and Walmart’s mobile traffic growth is coming through their own apps, not through broader searches.

This echoes the earlier comments made by Bill Gurley, long-serving general partner at Silicon Valley VC powerhouse Benchmark, during a “fireside chat” hosted by Sailthru on the evolution of the e-commerce space and the role of the sector’s giants. “If you’re purely going to compete with Amazon on price, or logistics, or speed of delivery, I think that would be very difficult,” said Gurley. “Amazon is doing some very aggressive things that are challenging even the companies like Google.”

As Gurley continued, “for many years Google was considered to be the very best business model possible.” However, he now feels, “Google’s gone from being the starting point to the search of last resort, and that’s pretty powerful.” The reason is that “when the user experience is so dramatically better, you go around Google.” And Amazon, through its Prime program and its all-round competence in achieving reliable fulfillment for its users, has achieved immense stickiness on its core user base, who now prefer to shop there where possible. “The consumer has zero anxiety of the quality of the product, immense trust about the deliverability … they trust on price,” “they don’t think Amazon is trying to get them,” noted Gurley.

Of course, e-commerce traffic is anything but Google’s only area of business, but it is an important one. And Amazon’s ability to eat into the online business pie at the expense of a major peer like Google augurs for some interesting developments going forward.


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