As countries around the world struggle to control inflation, and the cries of recession grow louder, most companies will be wringing their hands. But maybe less than Amazon.
Data submitted to Tikradar Pro Through the digital intelligence platform LikeWeb (Opens in a new tab) It shows that the e-commerce giant continues to progress from strength to strength, despite the bleak economic outlook and the declining amount of income available in trading.
Last month (July 2022), US web traffic to Amazon.com was up 10% at the back of this year’s Prime Day. A sudden increase in traffic is expected during the given sale periods, but the recent increase was greater than in each of the previous two years (6.3% and 7.5%, respectively).
In 2020 and 2021, consumers’ pockets were also lined with pandemic catalysts and extra money that could have been spent on commuting, and lockdowns left people with little to do but shop online. However, Amazon is on track to deliver a solid performance in online sales this year, despite pressure on its margins and an expected slowdown in consumer spending.
Inflation, what inflation?
In times of high inflation, the desire to spend among consumers usually falls off a cliff, due to both the increase in the cost of goods and the anti-inflationary measures put in place by central banks which affect the cost of mortgage and other loan payments.
In the UK, inflation is currently over 10%, its highest level in four decades – and the picture in the US isn’t much better either.
However, despite the gravity of the situation, the latest data from a similar site shows that Amazon has managed at least to some extent to inoculate itself against the negative effects of inflation on business custom.
What’s more, the company is actually getting better at persuading visitors to make a purchase. In 2020, Amazon achieved a conversion rate of 8.8%, but so far this number is still 11.6%. In the same time frame, conversion rates across retail sites like Ebay, BestBuy, and AliExpress remained flat at less than 5%.
Amazon’s ability to thrive in a less favorable economic climate may be due to a number of factors, from its reputation for bargains, to the efficiency of delivery and its drive to staples with services like Amazon Fresh.
Our best guess, however, is that Amazon has continued to fine-tune its recommendations algorithm, so visitors are increasingly shown exactly what they’re looking for — and sooner.
This does not mean that the company will not face some pain, should the labor market decline or the cost of living increase. A reduction in the amount of income available in circulation is bound to do a disservice.
However, what is certain is that Amazon’s difficulties in the e-commerce market will pale in comparison to those of its competition.