Member Exclusive   //   January 18, 2024

Amazon Briefing: At NRF, Amazon pitches itself as an invisible retail partner

This is the latest installment of the Amazon Briefing, a weekly Modern Retail+ column about the ever-changing Amazon ecosystem. More from the series →

On the expo floor at NRF’s Big Show was a giant area dedicated to all things Amazon. It included Amazon Web Services, Amazon’s Buy With Prime option, Amazon’s Just Walk Out technology and much more. Largely absent, however, was mention of the e-commerce giant’s marketplace.

Indeed, as retailers, vendors and brands descended onto the Javits Center in New York City this week, it became clear that Amazon’s new pitch was on all the ways companies could work with Amazon quietly in the background.

One session featured an Amazon executive talking about how one restaurant used Amazon Pay for its checkout; another showcased the company’s cashierless tech; another spoke with a DTC brand about the gains it saw using Buy With Prime on its owned e-commerce page.

Put together, Amazon’s pitch this year was focused on pitching new customers that may not be interested in — or already rely on — Amazon’s core marketplace.

“It’s fair to say that this is part of a broader strategy of Amazon,” said Andrew Lipsman, an independent analyst at Media, Ads + Commerce. “Going forward, in order to grow, Amazon needs to look at other paths to growth that are not their core.”

Amazon’s third-party seller services remain one of its primary revenue drivers. In its third-quarter earnings, the company reported that it brought in about $57 billion in revenue from its online store and around $34 billion from its marketplace-affiliated services. Meanwhile, AWS totaled $23 billion in revenue during that quarter and advertising made $12 billion.

The take-home, as John Harmon, senior retail/technology analyst at Coresight, saw it, was that the new drumbeat is retail services. “There was no — no cloud computing,” he said. “It was all tech services.”

And though Amazon has focused on its tech services in the past, the emphasis on ancillary programs beyond pitching AWS as a service to power companies’ infrastructure is notable. As one source pointed out, Walmart, for years, reportedly tried to force partner brands to not use Amazon’s cloud services. Now, that services Cold War seems to have ended, with many companies using AWS in multiple capacities without fear of retribution. “Things have thawed quite a bit,” this source said.

As such, Amazon can focus more on other ways to infiltrate retail companies.

Even the way Amazon spoke of these services was all about taking the emphasis off of its core marketplace platform. During a session discussing Buy With Prime’s partnership with Salesforce Commerce Cloud, Peter Larsen, vp of Buy with Prime & multi-channel fulfillment, emphasized the invisibility of Amazon as a vendor. “Note,” he said, “this is not an Amazon takeover of a DTC site.”

Instead, he focused on the perks of having a single checkout button on an owned e-commerce site. According to Amazon’s numbers, brands that use Buy With Prime saw uplifts in shopper conversion and overall new shoppers.

It may only be a tweak in the Amazon pitch, but brands are taking notice. “I think Amazon is trying to extend their value to DTC,” said one brand executive who has been in talks with Amazon about implementing some of its new back-end features. “The theory is that this will help us acquire more customers effectively and convert customers more efficiently.”

As this executive saw it, they had never seen Amazon speak like this with brands in the past. Before, Amazon tried various ways to push its own tools so that most, if not all, transactions were done within Amazon’s walls. They pointed to Amazon Webstore, an early attempt from the company to get brands to use Amazon’s tools to build their e-commerce sites. Webstore first launched in 2010 and was sunset in 2015.

Now, likely due to the rise of Shopify and other dominant e-commerce platforms, Amazon is rethinking the way to lure in retailers of all kinds. “They were like, ‘we don’t want to build a platform — we want to integrate with these platforms so that we can be a part of it and support and actually acquire these customers through these platform integrations.'”

For now, brands welcome this change — it allows them more ways to use services like Prime. “It’s a win-win,” said the brand executive. “Who’s winning more? I don’t know yet.”

Amazon news to know

  • Amazon launched a new AI assistant that lives within product pages, according to Marketplace Pulse. It lets shoppers ask questions about products and then uses AI to cull product info and reviews to present the most relevant information.
  • Amazon is preparing to launch a paid version of its Alexa voice assistant, Business Insider reports. The company is also reportedly working on overhauling the technology to make it less buggy and more useful.
  • Amazon is partnering with regional sports network Diamond Sports as part of its bankruptcy agreement, writes the Associated Press.

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