Year in review & Amazon’s fine in Italy

Updates: Amazon

Year in review: How did 2021 go for Amazon?

Marketplace Pulse took a look at the most important marketplaces in 2021. The result: Amazon clearly dominates the market. Sellers were especially important for the company’s financial results: they are responsible for 65% of the total revenue, the 3P marketplace grew by 30% compared to 2020. There are also exciting figures to be mentioned related to growth of Amazon Advertising: the average CPC of $1.33 at the end of 2021 was 37% higher than the previous year’s figure as demand grew far more than the supply of ad space.

Amazon plans to expand its grocery delivery business

Since last year, Prime members in the UK have been able to order groceries and have them delivered within the same day. American and European Prime users are now expected to benefit from this service starting in 2022. An increased collaboration with more retailers and supermarkets is expected to deliver more choice and greater convenience for customers. Amazon also wants to increase its delivery capacities. After all, there is stiff competition in the market with quickly growing companies like Gorillas, Flink & Co.

Italian antitrust authority punishes Amazon

Italy’s antitrust authority has fined Amazon more than $1 billion for alleged abuse of its dominant position. Amazon is alleged to have given preferential treatment to FBA sellers on its Italian marketplace that also use other services offered by the company. Amazon said it disagrees with the decision and will appeal it. Our Country Manager Italy, Giuseppe Peschechera, shares more details of the situation in his comment further down in this edition of our newsletter.

Amazon seeks to prevent law on shipping books in France

Amazon is trying to take action against uniform shipping fees for books in France: A minimum price of €2 to €5 is to be introduced there. Amazon had announced it would raise its own shipping fees from 1 cent to up to €2 (local bookstores currently take €5 to €7) if the law did not come into effect. The argument that an increased minimum fee would harm customers probably only serves to conceal Amazon’s intention to continue to have a competitive advantage by offering the lowest shipping prices in the market.

Updates: E-Commerce

American e-commerce prices are up in November

US online retail prices have been rising for 18 months, according to the Adobe Digital Price Index. In November, they were 3.5% higher than during the same period last year, CNN reports. This was the sharpest increase since 2014, triggered by supply issues and strong customer demand. However, deals during the holiday shopping season provided a price reduction of about 2% compared to the previous month.

First figures of the Christmas shopping season in Germany

Despite congested seaports, growing inflation and more difficult conditions related to the COVID-19 pandemic, e-commerce sales in Germany started to increase right on time between the beginning of October and the end of November. However, a positive “Corona effect” is not yet emerging this year, with the 15.8% increase in sales falling short of the previous year’s figure. If there was a special boost for online businesses due to the introduction of 2G rules in the retail sector, it will only become apparent when the final annual results are available in January 2022.

54% of online shoppers pay close attention to reviews

A representative survey by bitkom in Germany found out that customer reviews in online stores are the most important decision-making criterion when making purchasing decisions online. 54% of respondents said they look at reviews before buying a product on the internet. On average, only 44% of respondents obtain additional information about a product from retailers’ and manufacturers’ websites. We have summarized all the information about reviews on Amazon in a blog post on our website.

What caught our attention

Aminimum monthly budget of 30,000€ for managed service campaigns in the Amazon DSP will apply starting in January 2022. Previously, the campaign budget had to be at least €10,000. As a result, many advertisers are likely to switch to the Amazon DSP Self-Service.

Comment: Amazon’s punishment & dominance in Italy

Italy has fined Amazon $1.3 billion for the abuse of its market dominance. The platform is accused of favoring FBA sellers on their marketplace.

The reason why the initial fine is this massive is not only related to sales on Amazon themselves, but also lies in the state of the art of logistics for online commerce in Italy.

Up until a few years ago, the average Italian consumer cared less about delivery times compared to other EU countries. E-commerce after-sales services and returns were not much used in Italy.

Amazon has set a new standard with its “Fulfillment by Amazon” (FBA) and after-sales services though. Now, consumers expect ultra-fast deliveries with the possibility of returning goods easily as they like.

However, Amazon is almost the only player in Italy that can offer this level of services because of its company size. The majority of Italian merchants and marketplaces still have to make agreements with logistics partners which charge expensive fees, fulfill deliveries only within more than two days, have high return costs and prioritize Amazon shipments during peaks.

The Italian antitrust authority has now focused on the impact Amazon’s dominance has when selling on the marketplace. Meaning that, given the standard logistics setup and services Amazon offers, sellers that are not using the FBA program see their offers most likely negatively impacted when navigating on the platform.

The effects of this dominance, however, extend also outside of Amazon, impacting smaller DTC merchants and marketplaces. The standards set by the FBA service have an effect on where consumers decide to purchase products online.

Remdash: Keyword-Highlighting

Remdash’s keyword highlighting makes the creation of Amazon content much easier: the keywords entered are highlighted in different colors. This makes it clear at a glance which keyword is present how many times in which area of the Product Detail Page (PDP).

Interested in Remdash?
Just click here and arrange a personal product demo with our team.

Top 5 Amazon Keywords

In all the countries we analyzed, Christmas gifts were being searched for the most. What is striking is that men seem to be less creative when it comes to choosing the right gift: Except for France, more gift ideas for women than for men are looked up everywhere. Among all online shoppers, the favorite Christmas present for children seems to be Lego.