The new customer service offering comes at a moment when Amazon’s own fulfillment infrastructure appears to be under heavy strain -- and as some sellers opt to take their chances on self-fulfillment, Amazon can still maintain an extra slice of their business through Customer Service by Amazon.
Amazon aggregators are beginning to turn to B-to-B sellers for growth. But in focusing on this segment, aggregators are also underscoring just how big of an opportunity B-to-B has quietly become for Amazon -- and Amazon sellers -- writ large.
In 2020, Amazon Logistics delivered 4.2 billion parcel shipments, up from 1.9 billion in 2019. It now makes up, by volume, 21% of the parcel shipments in the U.S., behind the USPS (38%) and UPS (24%) but ahead of FedEx for the first time (16%).
In its quest to become everything to its customers and its sellers -- the company that both controls the plurality of retail sales in the U.S. and manages shipping and fulfillment for an ever-larger share of its millions of sellers -- Amazon might, in some ways, have over-promised what it can handle.
Amazon’s department store plan, if it does come to fruition, underscores something else: Amazon, which until recently was a purely e-commerce operation, has ramped up its investment in physical retail stores over the past three years. In addition to department stores, it’s in the process of building close to 40 Fresh grocery stores in the near future, which add to its total of 30 Go convenience stores and 24 Amazon Books stores.
In 2018, Goja was one of the top 40 Amazon sellers in the world, and a year later, in 2019, it received an investment from JP Morgan, 3L Capital and Next Coast Ventures for an undisclosed amount in order to begin acquiring existing brands for the first time. Goja founder Walter Gonzalez Jr. spoke with Modern Retail about how the landscape has evolved.
Though Amazon has warehouses virtually everywhere in the U.S. in order to meet its delivery commitments, its physical footprint is not equally spread out across the country. As e-commerce booms, it’s beginning to reshape the landscape of some cities. A new air hub in Cincinnati showcases this.
While some experts see Amazon delivery bots as having potential to reach customers, in general, “it’s just not gaining as much traction as you’d expect at that point,” said one expert. Delivery robots, on ground or by air, have never gotten past the pilot phase. And recent Amazon changes help explain why.
Only about half of Amazon's overall revenue is coming from first-party retail, the business that first catapulted Amazon to prominence. The other 50% is coming from Amazon’s newer businesses: seller services; subscriptions, mainly through Prime and Twitch; Amazon Web Services; and advertising.
Acquirers are not just entering more countries. They’re also rapidly expanding the marketplaces where they are acquiring brands. Until this year, the rollup space was nearly singularly focused on Amazon-native brands -- but now acquirers are beginning to buy up brands native to platforms like Flipkart, Mercado Libre, Shopee and many more.
While other states have had conflicting rulings over Amazon's liability risk -- a court in Texas last month said Amazon wasn’t on the hook for a battery sold by a third party, for instance -- the growing number of legal authorities who are holding Amazon accountable is a concerning sign for the company. The U.S. Consumer Products Safety Commission lawsuit is only the latest.
Amazon's new climate badges, launched last September, have failed to make waves among sellers after their initial rollout. While they do hold promise for attracting new customers, even sellers that have received the necessary certifications are struggling to actually receive the climate badges.
As Amazon invests heavily in building new warehouses, leasing planes and hiring thousands of delivery workers, a new partnership with BigCommerce partnership offers a path for Amazon to monetize its new shipping capacity -- all using a carrier model not so dissimilar from a UPS or FedEx.
A new feature that Amazon started rolling out in June allows sellers to send messages -- scripted by the company -- to customers who leave one-, two- or three-star reviews of their products. That gives sellers the chance to respond to negative reviews is a strategic move for Amazon, as it once again battles a fresh round of scrutiny over fake reviews -- and it might let sellers keep their star ratings high without turning to paid reviews.
Anycart, which opened its doors to customers everywhere in May after undergoing beta tests stretching back to 2019, is a marginal player for now, but it captures a new, growing consensus for how to inspire people to make more impulse purchases online: build a platform for shoppable recipes.
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