It’s no secret that Amazon has an appetite. Much like in other industries, the e-tail giant has heavily impacted the consumer electronics ecosystem and taken a larger share of the pie. Now, pure-play incumbents must adapt or die. Here’s what consumer electronics brands should keep in mind when trying to maintain retailer recognition and the spotlight.
Last year, Amazon saw nearly 30% growth in consumer electronics sales, making it the largest retailer in the industry by dollar value. Consumer electronics brands took note, adapting their partnerships with retailers to reflect the changing tides. While 58% of brand sites link to Amazon, 48% link to Best Buy, according to Gartner L2’s latest insight report on the topic. However, sales on retailers yield smaller margins for brands. Due to this, many electronics labels do everything in their power to keep the purchase process in their own territory before getting tangled up with other retailers.
Additionally, brands may find it increasingly difficult to plug their products on Amazon due to the unparalleled number of brands, resellers, and products on the site. The average brand tracked in Gartner L2’s study achieves 19% ownership of first-page listings on Best Buy, Target and Walmart, but falls to 14% of Amazon real estate.
That said, an Amazon-only strategy can seriously pay off for smaller names that don’t distribute directly on big box stores like Best Buy and Target. For example, untracked brands LETSCOM and Mpow gain the lion’s share of real estate on the site, pushing larger, more established brands further down the page.
Notably, while Amazon itself has only a few hardware devices, it has the home field advantage, taking up the greatest amount of real estate with a whopping 46%. In fact, the Amazon Kindle, Echo and Dot products have an average ownership that is ten percentage points higher than the next competitor, and over thirty percentage points higher than the average of all tracked brands. As the commerce company presents more challenges and opportunities to the electronics industry, the struggle to remain current is heating up.