How Amazon is Reshaping the Future of Ecomm, again.

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📆 Wednesday, 18th October 2023

Hi, and welcome back to Growth Espresso - your one-stop destination for ✨ everything ✨ D2C and E-commerce.

Today, we talk about how recent developments at Amazon amid the biggest anti-trust lawsuit they’re facing can potentially change the world of e-commerce and what it means to you 🤔 

Their interesting developments around seller policies, advertising, & supply chain are something you don’t want to miss 🚫 

Curious? So let’s dive right into it 🤿 

But first, here’s a little word from our sponsor

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Now back to Amazon…

📦 Amazon's Evolution as a Seller-Friendly Platform

Historically, sellers have had difficulty controlling their brand image, managing their reputation, and having access to data at Amazon.

In recent years, Amazon has given brands more control over their presence, evident in enhanced "Amazon Storefronts" and richer visuals in ads, transforming the shopping experience. Now, brands showcase larger images and videos atop search results, creating a more engaging and dynamic shopping environment. They’re also empowering brands with more data access, including search queries and purchase info, marking a friendlier approach.

A pivotal shift is "Buy with Prime," enabling brands to integrate Amazon's checkout on their websites, featuring Prime shipping speeds.

Notably, despite already commanding 60% of the e-commerce market, a significant chunk of transactions still occurs on individual websites, primarily hosted on Shopify’s platform.

📊 “The Amazon Effect” In Logistics

Amazon is transforming its shipping operations by bringing logistics in-house, creating a vast "last-mile transportation network" rivalling UPS in size. This strategic move sets Amazon apart in the e-commerce realm, known as "The Amazon Effect," as it reshapes customer expectations for fast and free shipping. CEO Andy Jassy's commitment to achieving the fastest Prime delivery speeds in 2023 underscores this ongoing innovation.

Beyond last-mile delivery, Amazon has invested heavily in a global ocean and air freight logistics operation, extending these capabilities to 3rd party sellers for efficient transportation from manufacturers to Amazon fulfillment centers. Additionally, Amazon Warehousing and Distribution further enhance their logistics capabilities for larger wholesale orders.

💰 Amazon Ad’s Expansive Reach

Amazon's Advertising business has grown a lot, making a huge $31 billion every year. In the past, only brands selling directly on Amazon used its ads, but now more people pay attention to it. Amazon.com is the 6th most visited site in the US, and they spread ads on other platforms like Twitch and Prime Video.

Amazon invests a lot in content, having branded TVs and exclusive rights to Thursday Night Football. Recently, they even said they're putting ads on Prime Video.

Amazon's ownership of Whole Foods also lets advertisers see how digital ads affect in-store sales, making their advertising platforms powerful for measuring the impact of TV commercials.

📍 Stitching it all together

Imagine you have a brand making products overseas. Your stuff is in regular stores, on Amazon.com, and on your own website. Amazon helps by carrying your product across the ocean, storing it, and restocking stores and Amazon centers. Your website, hosted by Amazon, gets orders filled by the same centers and delivered by Amazon. You advertise on Prime Video and Thursday Night Football, collecting data when people buy from Whole Foods, Amazon, and your site.

In this setup, Amazon makes money from:

• Shipping across the ocean

• Storage

• Shipping to centers

• Sending to customers

• Advertising

• Purchases

They also handle the tech stuff with servers, hosting services that big companies like Netflix and Airbnb also use.