Amazon Q3 Results | Tambo Whitepaper Webinar | Amazon Unboxed | Luxury Bags Hit Amazon | Amazon Vendor Course
Amazon Q3 2022 Results
Like the rest of Big Tech, Amazon has had a rocky year so far as it confronts macroeconomic headwinds, high energy prices, soaring inflation and rising interest rates. Their decision to double warehouse capacity over Covid has proved to be a poor decision. They are now having to reduce capacity in the US and cut operational cost globally to improve profitability. Those challenges have coincided with a slowdown in Amazon’s core retail business, as consumers returned to shopping in stores.
Whilst profitability has stumbled, net sales has grown at 15% in the 3rd quarter. The US growth was notably stronger than international, which only grew at 12% (-5% if you include currency changes). These results mirror the macroeconomic impact of the Ukraine war on Europe vs the US.
Amazon’s advertising business was one bright spot in the results, bucking the trend of its digital ad peers Facebook, Google and Snap, whose ads businesses have been hit hard due to the economic environment. Ad revenue surged 25% year over year to $9.55 billion during the quarter, which handily topped analysts’ estimates of $9.48 billion.
In the results call, Amazon was clearly unsure as to what will happen with Q4. Anticipated net sales growth were estimated to be between 2%-8% on 2021 and operating income between $0bn & $4b! If the Prime Early Access Sale is a lead indicator of Q4, we think this is a good estimation. Whilst shopper are staying with Amazon - because of their focus on value and convenience - during uncertain economic times, they are reducing basket size and shopping more carefully.
In summary, Amazon is feeling the pressure but is maintaining momentum into Q4 and beyond. They've proved that their customer proposition, their global reach and their depth of services ensure that they can withstand tough economic conditions.
Tambo Health Whitepaper Live Webinar
The over-the-counter and pharmaceutical market has seen rapid change over the past 5 years and Amazon has been a major protagonist. The Tambo Health Whitepaper was born from many discussions with various healthcare industry experts, clients & retailers and supplemented by data from our proprietary Amazon intelligence suite, Tambo Compass. The Whitepaper provides an analysis of the online healthcare category, with a deep-dive into OTC and Amazon as a primary growth channel.
This event will share findings of our Whitepaper together with a panel of industry & e-retail experts who will share their insights & points of view on the following topics:
?How important is Amazon as an OTC channel?
?What are the growth barriers that OTC brands need to navigate on Amazon?
?Who are the main players/brands in e-retail OTC?
?What is the e-retail customer journey?
?Optimising Amazon content, advertising and operations to accelerate growth?
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Amazon Unboxed - New Advertising Features
Amazon announced new advertising capabilities at its Unboxed event. There is no major update but some interesting development areas that we expect to see continue:
1.?Advertising for non endemic Brands on Amazon i.e. brands that don't sell on Amazon.?The announcement at unboxed was that these brands can now use Sponsored Display to advertise to the audiences on Twitch.?It's in beta and it's a small test, but we'd expect this to roll out, given the additional industries it opens Amazon Advertising up to (Travel, Finance etc).
2.?Sponsored Display getting all the upgrades. Rewarded Sponsored Display - adding in Amazon shopping credits into the creative will be an interesting test whilst Sponsored Display Video creative continues on the back of that format now being available in the US & EU.?We've felt the sponsored display push from Amazon for the last 18 months so it's not surprising to see the continual product development.?It's still unclear whether the direction of travel is for Sponsored Display to replace DSP altogether or for DSP to potentially remain as the advanced option for larger, more sophisticated advertisers. One to watch.
Louis Vuitton, Chanel, Hermès Bags Hit Amazon Through Secondhand Distributor
Amazon now has a luxury store that sells designer goods and pre-loved luxury fashion items? There’s nothing that this marketplace can’t do.
It’s great to see Amazon is continuously revolutionising commerce by expanding their offering and pushing sustainable practices. As a customer-centric e-commerce, Amazon really understands what their customers want; seeing the luxury goods resale market trend and the successes from other marketplaces i.e. eBay.
With Prime delivery, you can shop from the comfort of your own home and receive products the next day. This is going to be especially exciting within the Millennial and Gen Z customers. They've been sharing their interest in vintage and pre-loved luxury, as well as fast delivery. With Amazon’s reputability and returns policy, there is a new confidence around buying luxury items there.
However, it is important to remember that with the luxury goods market, there is more emphasis from the consumers on knowing exactly what they’re buying, and understanding its condition in detail. For this reason - sellers in this space will need to optimise their content in order to reassure potential customers to make significant purchases in an entirely virtual manner.
Amazon Luxury Stores is now available in the UK too but not for pre-loved luxury items. I’m sure Amazon UK will catch up very soon.
British Brands Group Amazon Vendor Course
Amazon Vendor Management course starting next week
This highly-rated, comprehensive and interactive online course for suppliers provides an extensive, practical guide to Amazon Vendor Management. It outlines how to drive growth on Amazon and explains the key processes involved in listing, optimising, marketing and advertising your products. With regular Q&As, you will be taken through the Vendor Central portal and shown how to manage your account to improve performance and minimise operational and financial charges. Delivered by Tambo across two afternoons – starting next week 2nd & 9th November 2022.
Book now or call John on 01730 821212 for more information. ￡40 discount when you use the booking code?BBGTambo
That's all for this week. For more news on Amazon or other marketplaces, and updates about Tambo visit our?blog.