Into The Amazon Digital Jungle
Whoa, what ants got into Amazon.com’s pants this quarter??
Amazon announced earnings earlier today, and though profits for the first quarter dropped 35 percent to $130 million from last year’s same quarter, revenue jumped 34 percent to $13.2 billion, beating the Street’s expectations.
Is this a bellwether indicator for e-commerce en generale, or is it isolated to the ‘Zon?
Hard to say, but The Wall Street Journal is reporting that part of Amazon’s spending has gone towards making itself operate more efficiently. If you remember, Amazon spent a cool $775 million to buy Kiva Systems last month, which is intended to help them automate and lower their warehouse operations costs.
The Journal story’s also highlighting the fact that the e-commerce market in general “has been strong,” with Amazon reporting particularly good sales for digital goods, including e-books and online video (which, read, means little to no distribution costs other than bandwidth!)
In Amazon’s earnings press release, Amazon pointed out that “9 out of 10 top sellers on Amazon.com were digital products — Kindle, Kindle books, movies, music and apps.”
In the quarter, Amazon also introduced a new version of its Kindle for iPad app, which is the #5 free iPad app of all time and the #1 free books app on iPad.
The Amazon left jab strikes Apple on the chin! Pow!
The Kindle, retailing for $199 through Amazon, continues to be the company’s best-selling product, and the most “gifted.”
I may have even contributed to the strong quarter with a few Amazon purchases meself, come to think of it!
For my money (what little I have left of it after shopping with Amazon), this digital trend is a larger barometric indicator — folks are finally getting more comfortable with consuming books and other media in digital formats, and though it certainly has a negative impact on the “traditional” media industries on one side of the balance sheet, that starts to get offset as the digital column increases.
Of course, I haven’t even gotten to some of the social commerce trends which Amazon is also likely benefiting from (mentions via Facebook, Twitter, etc.) and their own leading adoption of customer ratings and reviews.
Click, mortar, AND pixels is the name of the game for smarter commerce, something IBM thought leaders will be discussing at the upcoming IBM Global Smarter Commerce Summit in Madrid May 22-24th.
More on that in a prior post here.
Written by turbotodd
April 26, 2012 at 11:16 pm