Amazon, with another flurry of Prime Day-style deals this week, may seem like it’s doing everything it can to drive you to its store. But it’s quietly finding ways to participate in your online shopping elsewhere, too.
Amazon commanded more than 37% of the US e-commerce market last year. After touting its last Prime Day sales event in July as the biggest (again) of the event, it’s earning a second sale withTuesday and Wednesday.
But if you look around, you might see signs that Amazon is taking your online shopping to new places. In April, Amazon unveiled a “Buy with Prime” program that allows sellers to add a button to their own websites. By clicking on it, customers can access Prime benefits for a purchase outside of Amazon’s extensive store, with Amazon handling payment and shipping. Buy with Prime makes sense in light of another feature announced last year: Local Shopping, which allows third-party sellers to offer pickup from their storefronts on Amazon’s online marketplace. Both facilitate transactions that typically don’t involve Amazon at all.
Both are also examples of how Amazon leverages its logistics prowess for other retailers. But together, these features also give Amazon entry points into some of your online transactions where it was previously locked away — another way for the retail giant to get its tentacles into your shopping cart when you’re someone else’s customer.
Peter Larsen, Amazon’s vice president of Buy with Prime, said in a statement that the company helps retailers grow sales “by offering shopping benefits that millions of Prime members love and trust — including fast, free delivery and a seamless checkout experience. “
An Amazon spokesman added in a statement that the company invests billions annually in building the infrastructure and services needed to power the businesses of third-party sellers and merchants, whether they’re on Amazon or not.
“For more than 20 years, we’ve been delivering innovative capabilities to boost small business success,” the spokesperson said, “and we continue to look for ways to innovate on behalf of and delight entrepreneurs and small business owners.”
Right now, you’re seeing events like the Prime Early Access sale this week because Amazon and its ilkearlier in the year, according to analysts. And any purchases made outside of Amazon’s website during the deal frenzy?
Amazon would like a piece of that, too.
Amazon comes out from behind the scenes
Although you may not have noticed, Amazon has been processing customer payments and delivering packages for certain purchases made on other companies’ websites for years. Amazon Pay and Multi-Channel Fulfillment were introduced before 2020.
Introducing a Buy with Prime button on a retailer’s website enhances this process. Amazon processes payments and fulfills orders as if the purchase were made on its marketplace.
Beyond Amazon’s fulfillment support, Amazon will also advertise certain sellers using Buy with Prime on social media platforms, sending customers directly to the brands’ websites. Sellers can also use an official badge to advertise Buy with Prime in their own marketing.
Amazon will even create some off-site ramps for participating sellers: Businesses will be able to redirect shoppers away from their Amazon Marketplace storefront to their own site to use Buy with Prime.
With the in-store pickup option, which is still in its early days according to Amazon, shoppers who want to pick up something from a nearby store today can search for it on Amazon without having to navigate to individual business websites. In addition to driving more of the big retailer’s customers to local businesses, the feature requires those stores to list merchandise on Amazon to facilitate purchases.
Amazon did not say how many retailers are using the Buy with Prime button, which is available to sellers by invitation only for now. One brand that uses the service, Great Circle Machinery, said in an Amazon press release that half of its sales have come from the Buy with Prime feature since it was added.
“It’s hard to gain the trust of shoppers to make a purchase on our site,” said Patrick Sean Briseno, the company’s director of e-commerce and marketing, noting that the Buy with Prime badge lends credibility.
Brian Yarbrough, a financial adviser at Edward Jones, said some shoppers may find it more welcoming to go to a company’s website to learn more before making a purchase — but still want the benefits of a Prime membership.
The shop for everything, everywhere
Prime purchases and in-store pickup are part of a long-term strategy to expand Amazon’s e-commerce business beyond its website, retail analysts say. Just likeAmazon has more fulfillment and logistics infrastructure than it needs as a result of rapid manufacturing to keep up with pandemic demand.
Tools like these are ways Amazon can use its extra fulfillment capacity, said Neil Saunders, retail analyst at consultancy GlobalData.
The options may even appeal to retailers who don’t see the value in selling from an Amazon storefront, but could benefit from Amazon’s other services. “Amazon can say: Maybe not everyone wants to be in the marketplace, but we have all these logistics offers and payment offers,” Saunders said.
In addition to engaging in more shopping, Amazon’s features can feed more data about your shopping habits to the big retailer. That way, Amazon has an even clearer picture of what you’re buying and how you’re buying it.
Amazon says it doesn’t sell user data and pointed to a Buy with Prime FAQ that says the company won’t use non-public information it gets from those purchases to make its own sourcing, inventory level or pricing decisions. which applies to Amazon products and those from third-party sellers. It also says Amazon will not use non-public data from Buy with Prime purchases for marketing or personalization features in its online marketplace.
But such data has the potential to be “very valuable,” Sanders said. Amazon already uses your purchase information from its own website to recommend other products and place ads in your search results, for example. The company has also been accused of violating its own policies by not using data from third-party sellers in its marketplace to produce competing private-label products. Under investigation by Congress in 2020, then-Amazon CEO Jeff Bezosthe policy had never been violated.
Amazon’s expansion into further corners of the e-commerce industry is likely to draw the attention of federal antitrust regulators, whocompany practices. The company is far from dominating the market for tools that facilitate purchases from a merchant’s website, Saunders said. Shopify, Salesforce, and Adobe are among the many businesses that offer these services.
But Amazon doesn’t necessarily need to dominate a second industry for these fulfillment features to further bolster its e-commerce market share, said Sucharita Kodali, retail analyst at market research firm Forrester. Additionally, Amazon’s promises not to use the data it collects from these features may not satisfy the government.
“It would be something I would think antitrust regulators would frown upon,” Kodali said.
For now, it might just mean you’ve delivered more boxes with that Amazon arrow smile.