Shipping boxes that are available in Paper Mart are essential for ecommerce and web-based retailers. In the US, ecommerce giant Amazon.com Inc. made a deal with Comcast Corporation’s Universal Pictures and Illumination Entertainment to make their boxes more appealing by having them in bright yellow and decorated with characters from the animated film “Minions”.
This is the first time that Amazon has decided to offer its boxes as advertising in a deal whose financial details were undisclosed by the ecommerce giant. The deal also includes a dedicated online storefront for Minions merchandise.
While Amazon’s rival department stores are also gearing up to compete in the ecommerce, experts say that these companies are still trying to figure out how to profit from ecommerce.
According to Forrester Research, ecommerce is expected to reach $414 billion, which will be about 11% of all US retail sales, by 2018. This means that online storefronts would lead to better profitability for any retail store.
However, analysts have estimated that online storefronts cost 25% of sales. Yet, this doesn’t seem to scare Amazon as it still continues to make offers to drive down the prices of shipping by even offering free shipping for small products under $10. This Minions campaign, experts say, is how Amazon is offsetting free shipping with the volume of shipping.
Satish Jindel, president of SJ Consulting Group Inc., says that the Amazon Prime Box is a neat concept that may possibly make a lot of money through scale by doing things that haven’t been done before.
SJ Consulting Group Inc. has estimated that Amazon ships about an average of 3.5 million boxes per day. Therefore, there is the possibility of offsetting free shipping.
Similar shipping companies like UPS and FedEx have, in the past, allowed their corporate customers to use their own shipments at their disposal by putting their own branding, according to Jindel. However, he also said that this is the first time that third party advertising has ever been put on shipping boxes and parcels.
Jindel believes that other retailers will have a difficult time to compete with Amazon if it comes to a point where free shipping can be recovered from deals similar to the Minions advertisement.