Confirmation, perhaps, that stores really are essential for the future of retailing comes as Amazon opens its first bookstore in its home town of Seattle. We’re hearing the news of Amazon’s move today into bricks and mortar even as figures in the UK suggests that multichannel retailers who sell on the high street are challenging Amazon’s lead in sales of DVDs, CDs and games.
HMV , Game and Argos all increased their share of the physical entertainment market in the 12 weeks to September 27, with HMV just 2.5 percentage points behind Amazon , analysis from Kantar Worldpanel suggests.
Overall, more sales of physical entertainment goods, such as CDs, DVDs and games, were made in the high street during the period than at the same time last year. Some 68.4% of all physical entertainment sales took place on the high street during the period this year, up from 64.6% last year. “This strong performance,” said Fiona Keenan, strategic insight director at Kantar Worldpanel, “has been led by the games market in particular, where high street spend grew by 7% in the past quarter.”
She said that while online was losing market share to the high street, it retained a convenience factor that was still “incredibly appealing to consumers who are simplifying the process further by opting to shop directly through their smartphones. Mobile purchases accounted for almost 10% of online physical entertainment sales this quarter, up 23% on this time last year. With over 37 million people owning a smartphone, this is a significant opportunity for retailers to tap into.”
But Keenan believes that online retailers will regain their ground in the upcoming Black Friday week. “The week of deals leading up to Black Friday is typically the biggest of the year for both video and games, and given Amazon’s significant focus on the campaign we’d expect it to come out on top again,” she said. “But while sales figures resulting from the campaign are impressive, past offers have appealed to shoppers that already buy these types of products, rather than enticing new shoppers into the market and really driving incremental spend.”
Commenting on Amazon’s new store, Viv Craske, head of innovation and digital at retail and shopper agency Live & Breathe, said the move made sense. “Amazon is in a unique position to help people find the perfect book for them, and to deliver that in a physical environment with all the joys of browsing the bookshelves that online stores lose. This is all thanks to the power Amazon has with publishers, combined with its proprietary sales data and customer reviews.
“If this format is a success in terms of footfall, even if the operating costs are significantly higher than its online operation, Amazon may well be willing to open more stores in a multi-channel play. You could expect a flagship store in London as part of a format rollout of trial stores in the UK.”
Meanwhile, it seems the battle between Argos and Amazon will take place online as well this Christmas. Analysis by SEO platform Linkdex suggests that when online browsers search for typical Christmas gifts, such as Playstation 4, Apple iPad or children’s bikes, the biggest share of visits from Google organic search engine results goes to amazon.co.uk, closely followed by argos.co.uk. The analysis is of more tan 7,000 keyword terms, representing 8.5m monthly searches in the UK between August and September 2015. Google findings suggest that some 20% of consumers have already started their Christmas shopping by September.
Following on from amazon.co.uk, which wins visits from 2.88% of searches, argos.co.uk (2.87%), are apple.com (2.67%), currys.co.uk (1.65%) and tesco.com (1.42%).
Jono Alderson, head of insight at Linkdex said: “Christmas shopping starts sooner every year, and from as early as September we’ve been seeing a massive 8.5million searches per month for products, toys and tech which are likely to be big sellers this Christmas.
“Organic search represents a huge opportunity for retailers but, based on current data, some of the big players might have to resort to costly paid advertising to make up for shortfalls in their organic visibility if they want to capture traffic and sales over the Christmas period.”
