Thought Leaders in E-Commerce: Ethan McAfee, CEO of Amify (Part 4)

Sramana Mitra: From a macro perspective, what’s happening? Is the industry seeing a tremendous shift from Shopify to Amazon?

Ethan McAfee: Market share of Amazon has been growing. Right now, Amazon has over 50% online commerce. Amazon’s market share growth is coming from two eBay and Walmart. I think they’re also taking market share from individual brand websites. It used to be that you would go to fender.com to buy a Fender guitar. Amazon has basically become the default mall of the internet.

The second thing you’re seeing is as Amazon lowers the shipping time, that will continue to make them take market share. It will also dramatically increase the market share that they’re taking from brick-and-mortar.

As we go from a week to one day, the percentage of sales that people buy online versus brick-and-mortar will continue to dramatically shift towards internet. I always ask the question, “If I could order something on Amazon in four hours, would I ever buy most products at a local store?”

Sramana Mitra: That’s all fine. The shipping and logistics part is absolutely correct. What about personalization? If I’m an online merchant and I want to provide personalized products and services to my customers, I can’t do that if I don’t know the customer and if I go through Amazon’s user interface.

The only way I can do that is on my own website where I can provide the personalization. Especially when it comes to owning the customer. If I have a customer that has bought something from me and I start getting to know that customer, I can’t upsell and cross-sell on Amazon.

Ethan McAfee: You’re right. There are certain things that Amazon is good at and certain things that Amazon isn’t. Amazon would be very good at personalizing you as a customer across multiple brands. Amazon would not be good at personalizing your individual brand experience.

If you happen to like one brand, they’re not going to recommend other brands that are similar. That’s one category where Amazon is just never going to be very good at.

What Amazon is good at is selling you products that don’t have to be personalized and that you probably don’t buy that often. Repeat purchases or personalization would be good for Shopify websites or your local brick-and-mortar stores.

Sramana Mitra: I think Amazon is the best place for repeat purchase of general merchandising category. If you’re talking about something that has personalization, that’s where a branded website has value.

We cover is Shopify in our Technology Stocks series. One of the questions that I’m thinking about is the potential of this stock. The stock is very expensive today. If Amazon is going to cut very seriously into their customer base, what does that do to that stock? Have you thought about it?

Ethan McAfee: Shopify is one of the best platforms for small to mid-sized businesses. Shopify will continue to take market share in that space. Overall, that space continues to grow.

The second is I continue to believe that Amazon is going to take more and more market share of online ecommerce just because their fulfillment and distribution is going to be so much better than everybody else’s. Stocks prices are based on people’s expectations.

The Shopify stock price is highly priced because the expectations for it are very high. I’m always fearful when you have those types of stocks and the expectations aren’t realized, stocks could go down dramatically.

This segment is part 4 in the series : Thought Leaders in E-Commerce: Ethan McAfee, CEO of Amify
1 2 3 4 5