Amazon.com Dominating Online Book Industry

Posted on October 29, 1999

Gomez Advisors, a provider of e-commerce research and analysis, has released its Fall Online Bookseller Scorecard where Amazon.com received the top ranking. Showing its strength in the online book industry, Amazon won an unprecedented six of the nine categories in the Gomez Online Bookseller Scorecard. Following Amazon on the Scorecard is barnesandnoble.com, Books.com, Borders.com and gohastings.com

According to Gomez Advisors Senior Analyst Krista Pappas, "Amazon is clearly the Goliath of the online book market. They are the hands-down market leaders in technology, and marketing, and they have some of the best personalization on the web."

Despite recent industry speculation that Amazon's expansion into new markets such as auctions and Z-shops could hurt its core book offering, Pappas says this is not the case.

"As Amazon continues to broaden its Internet empire, its book offering has in fact grown even stronger. Their dominance in technology and channel management means that barnesandnoble.com, Borders.com and other online booksellers are constantly playing catch-up and juggling the challenges of their bricks-and-mortar enterprises," she concluded.

As the critical holiday shopping season approaches, Gomez Advisors expects fourth quarter global online book sales to surge to $570 million - more than doubling fourth quarter 1998 revenue of $237 million. "Gohastings beat every other bookseller in terms of pricing, but we don't expect cost to be the deciding factor in the fourth quarter," Pappas said. "The name of the game this season is customer confidence - people want to buy books from a reliable source and they will pay a bit more for that peace of mind during the holidays," she noted. Borders.com ranked number one in customer confidence in the Fall Online Bookseller Scorecard.

One advantage barnesandnoble.com and Borders.com have over pure Internet booksellers is their ability to leverage brick-and-mortar stores. Both chains have strong brand recognition. Borders is marketing their web presence in retail outlets and they are promoting policies that allow online customers to bring returns to their stores.

"Market opportunity is slim in the online bookseller world," Pappas said. "Between Amazon's overall dominance and the brand recognition of other large players like barnesandnoble.com and Borders.com, smaller online booksellers will be squeezed out," Pappas concluded.