Sizzle/Fizzle

Luxury Health Care Sizzles, Dodd-Frank Fizzles And Amazon Notches A New Vertical Win

At what point does a brand become sticky — so sticky that it transcends its own ecosystem or website and becomes portable? Pay with Amazon is demonstrating that top of mind can equal top of wallet, virtually and otherwise, as numbers this past week show the leverage a brand can have once it has captured the hearts and minds and clicking figures of users. In addition, while Amazon sizzled, Wells Fargo’s top brass saw a bonus flameout, and Dodd-Frank may be headed toward some surgery on Capitol Hill, via scalpel or bludgeon.

 

SIZZLE 

ATMs

Research firm RBR said that ATMs are gaining popularity in developing markets, with particular traction in the Asia-Pacific and the Middle East and Africa seeing ATM use growing by double-digit percentages annually. That also means that cash remains alive and well.

Luxury Health Care

Where once destination vacations may have included plastic surgery, more recently, a trend has developed where people come from around the world to gain access to top-notch specialists. The “medical traveler” is willing to pay roughly twice what might be seen in other countries, and according to PYMNTS/Flywire data on this trend, 40 percent of those medical tourists head to the U.S. Gotta love those global citizens.

Snap Billionaire Investors

And in what seemed like a snap of the fingers, the cofounders of Snap, which is planning to go public, are worth as much as $4 billion each. The cofounders, Evan Spiegel and Bobby Murphy, have 22 percent stakes in the firm, with bonuses on the offing that could take those stakes higher. Oh, and both Spiegel and Murphy are in their 20s.

 

FIZZLE

Dodd-Frank (the rollback may have begun, this time for real)

This time, the rollback may be no empty threat. President Donald Trump has issued an executive order to have the Treasury Secretary review the legislation, with an eye on devising a set of “core principles” for regulations, maybe scaling back what is in place. One point of contention: the duties of brokers and should their alliance be to their firms’ profit maximization or clients’ best interest?

Wells’ Brass To Lose Bonuses

In the wake of scandals that have rocked the company over the last several months, Wells’ board is likely to eliminate bonuses from 2016 that were to have been awarded to top brass, such as CEO Timothy Sloan, CFO John Shrewsberry and others. Easy come, easy go.

Retailers

Foot traffic declines hurt. Same-store sales anemia hurts. But must President Trump also add insult to injury? Getting yelled at by Trump adds insult to injury. Nordstrom is the latest target, having dropped Ivanka Trump’s fashion line. Neiman Marcus and TJX did, too. Get ready for tweets to fly fast and furious. But maybe not to worry — Nordstrom’s price was up 4 percent after the tweet at the close.

 

Sizzle of The Week: Paying With Amazon

Amazon getting a spot in the “Sizzle” section isn’t much of a surprise — one of the myriad benefits of enthusiastically tackling other verticals. But usually when Amazon brings the sizzle, we’re talking about commerce in some form or other.

This week, we are talking about pure payments.

By The Numbers

While long-term PYMNTS readers may not be shocked to learn how much of a payments player Amazon is, our Buy Button report last fall indicated that 10 percent of the internet’s top 1,000 retailers brandish the yellow Amazon button. That still trails PayPal’s 70 percent by a considerable margin, but it does put Amazon well ahead of other online checkout competition at Visa, Mastercard, American Express and Chase.

And, as this week’s data indicates, Pay with Amazon seems to be quietly creeping up on eCommerce in general — far away from the Amazon home site.

Earlier this week, Amazon released data that reported that 33 million customers have now used Pay with Amazon to make a purchase on a site outside of Amazon, up 10 million from April 2016. Half of those 33 million were Amazon’s most coveted customers — Prime. Payments volume reportedly doubled in that time, though Amazon did not disclose any official figures to go with that claim. Amazon’s latest release also indicated continued strong growth on mobile, with 32 percent of transactions via Amazon’s payment platforms coming from devices.

The Pay with Amazon service also expanded in a few regards. The service went online in France and Italy. It is also, as of 2017, represented on 21 percent of the top 100 German eCommerce sites. Amazon is also looking to push its payments expertise into new verticals, including government payments, travel, digital goods, insurance, entertainment, nonprofits and charities. The service also expanded its footprint among retailers and reported growth among its active merchant base at 120 percent.

The raw numbers are good, but the customers those numbers refer to? Might be better.

They Call Them ‘Prime’ Customers For A Reason

The data out this week indicated that, among those millions upon millions of Pay with Amazon customers, about half are Prime members. A fact that matters because Prime customers are the internet’s most enthusiastic shoppers. They log on more often, they convert more easily and they spend more while they’re there.

Non-Prime customers tend to spend a little under $1,000 per year on digital shopping.

Prime customers, on the other hand, spend an estimated $2,000–$3,000 annually online, depending on how long they’ve been Prime members. Because Prime customer spending isn’t just higher on average than normal shoppers’, it is also progressive, as it tends to go up by about 12 percent every year a customer has Prime (Amazon Prime’s customer retention rate is currently 90 percent).

Half of Pay with Amazon customers are Prime, which means that Pay with Amazon customers bring their higher-than-average habits to those sites, according to internal figures.

It seems solid that Amazon earned its Sizzle of the week this week by not only posting 33 million new consumer wins to the big board but somehow managing to do that with almost no one really noticing.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our April 2019 Unattended Retail Report. 

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