TikTok is Coming for Amazon’s Search Traffic

31st Jan 2023

Original source: Inc. has long been the dominant platform where people start their shopping searches for everything from earbuds to summer dresses making high search traffic. But its grip over that first step in a shopper’s journey is loosening as ByteDance Ltd.’s TikTok aggressively draws  traffic and becomes a more popular place for people to shop. TikTok’s growing influence has exposed Amazon’s big weakness: for all its success in retail logistics, it’s not really a fun place to browse or discover new trends.

Many giants have fallen in the cut-throat world of retail, and Amazon’s frumpy, catalogue-style platform risks pushing it into irrelevancy among those in their teens and early twenties — the shoppers of tomorrow — who demand entertainment, engagement and a dash of the unexpected from the brands and platforms they spend time on. Take, for example, the last festive quarter when 67% of consumers quizzed by Jungle Scout about social media and gifting said TikTok was the most influential platform for gift ideas.Last month, Amazon announced steps to catch up with a new feed called Inspire, billed as helping it break into what retail experts call social commerce.

Over the next few months, shoppers will see a lightbulb in the navigation bar of the Amazon app that will take them to curated reviews and ads for different products on the site. Think Instagram, but on Amazon. The idea is for shoppers to discover new things and feel influenced to buy the product with Amazon.

If that sounds familiar, it’s probably because Amazon announced something similar not too long ago. Amazon Spark launched in 2017 as a feature within the app, where members of its Prime service could post pictures of products with reviews, and anyone scrolling through could like the photo or tap the shopping bag icon to see a product listing. Spark never really caught on as a feature within the app and has since been transformed into Shop-by-Interest, where shoppers can select categories they are interested in and interact with other customers in the intention of improving search traffic.

TikTok’s success has added urgency to the Inspire launch. But as Amazon’s last foray into social commerce showed, adding another feature to the app won’t fix the glaring weaknesses exposed by companies like TikTok and retailers whose sites and apps are actually pleasant to use like Inditex SA’s Zara or Urban Outfitters Inc. The fact is that shopping on Amazon feels like paying a gas bill online. Its flat two-tone site lacks any aesthetic or organization that makes it easy or interesting to browse.

The app is similarly difficult to navigate. It’s designed as a place where people log in with a certain intent, complete their purchase, and sign out. More than 60% of shoppers start their search on Amazon with a high intention to buy, according to a September report from search and marketing analytics firm Jungle Scout. If all goes well, their goods arrive a couple of days later in a simple brown box. No razzle-dazzle, no fuss, just your order on time.

Amazon search traffic has made billions of dollars from being predictable, efficient and competitive on price. It quite literally transformed the retail industry around the concept of convenience. But after a rough 2022, which saw its retail business fray, thousands of layoffs and an estimate that US Prime membership growth flatlined, the biggest US online retailer is under pressure to figure out how to be more than a great delivery company.

Social shopping will only continue growing and Inspire will help connect customers with “shoppable content” created by other customers, influencers and brands, Oliver Messenger, director of Amazon Shopping said in an emailed response to questions. For now, shopper disenchantment is showing in the numbers. About 63% of those surveyed by Jungle Scout said they began their search on Amazon in the third quarter of last year, down from 74% in the first three months of 2021. In that time, TikTok’s share climbed to 21% from 10%. Losing its hold as the place shoppers go first to discover things means losing dollars.

The more shoppers browse TikTok and are directed to purchase straight from a brand, the less they spend with Amazon search traffic. Already, Walmart’s e-commerce business has squared up with Amazon stealing some market share during the online shopping boom fueled by the pandemic, and the turn toward essentials that’s followed.

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