What We Can Expect from Amazon in 2Q17

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Part 3
What We Can Expect from Amazon in 2Q17 PART 3 OF 14

Survey Shows Amazon’s Lending Business Is a Good Fit

Most online shoppers are moved by prices

According to the retail survey by United Parcel Service (UPS), product price is an important factor in online purchases. Of the survey’s 5,000 respondents, 81.0% stated that product price was the primary factor in their decisions when searching for and selecting products online.

Survey Shows Amazon&#8217;s Lending Business Is a Good Fit

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Lower product prices could draw more shoppers to Amazon

When Amazon (AMZN) released an update about its lending business last month, it said that merchants can use a loan to expand their inventory and discount items they sell on the platform. Therefore, the loans Amazon gives to sellers contribute towards lower pricing, which keeps shoppers coming back.

If product price is as important to customers as shown in the survey, then Amazon’s credit line for vendors could contribute to more shoppers starting their product search at Amazon Marketplace. Amazon’s active shopper population could grow and boost retail sales. Amazon’s overall sales rose 23.0% to $35.7 billion in 1Q17, as shown in the above chart.

Other potential benefits for Amazon

By being the preferred destination for online product searches, Amazon can benefit in several ways. First, the increased traffic could enhance its position as an advertising platform in competition against Facebook (FB), Alphabet’s (GOOGL) Google, and Yelp (YELP). Additionally, the company could tap into the increased search traffic for data to help it create more value for its merchants and consumers, such as better product recommendations.


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