Amazon’s Q1 2023 – All Challenges Overcome?

At the same time, Amazon is reducing its spending on fulfillment and transportation, in order to further expand its AI and cloud businesses. As such, the voice assistant Alexa is to be developed into the “best personal assistant in the world”.

Our fact of the week shows that customers rarely use Amazon to simply get inspired. Through a new cooperation with Pinterest, an inspiration platform, Amazon could soon make the connection they’ve been missing: Pins will be able to show ads that lead to a product page on Amazon, allowing inspiration-seekers to make a purchase at the end of their journey.

 New Blogpost

Sponsored Brand Video Ads: Advantages, Opportunities and Case Study

Published on May 5, 2023
By Jonas Först
Read now

Updates: Amazon

Amazon’s Q1 2023: Have the Challenges for E-commerce Been Overcome?

Amazon published its Q1 2023 results last week. Net sales grew by 9% year-on-year to $127.4B. This was mainly due to three e-commerce-related business units: Amazon’s advertising business: +21% to $9.5B, Amazon’s marketplaces business (3P): +18% to $29.8B, and Amazon’s US business: +11% to $76.9B. Things are looking up again for the marketplaces. Zalando’s Q1 sales also increased by 2.3 % to €2.3B compared to the previous year.

Amazon Continues Expanding AI and Cloud Business

Amazon is setting priorities: The company plans to spend less on fulfillment and transportation and instead invest in Amazon Web Services in the coming months. Amazon is also working on a new LLM for Alexa, a larger and more powerful voice model. According to CEO Andy Jassy, Amazon’s goal is to develop “the best personal assistant in the world.”

Amazon Removes “Editorial Recommendations”

For years, Amazon had a program called Onsite Associates, made up of people who worked with publishers to integrate products with top ratings into editorial copy. Now, however, Amazon has removed this section of the search results and replaced it with more ad units. According to spokeswoman Bertolino, Amazon has justified this decision on the basis that they make “regular adjustments after evaluating the potential of products and services.”

Updates: E-Commerce

Pinterest to Launch Ads-Kooperation with Amazon

Pinterest pins could be covered with ads later this year, which will then lead to the conclusion of a purchase on Amazon. Through this deal with Pinterest, Amazon Advertising has the chance to tap into a target group with high engagement. Our fact of the week shows that rather few users use Amazon exclusively for inspiration. These users however are frequently on Pinterest, and could now be won over as customers by Amazon retailers.

Digital Advertising Market Recovers with Q1 Revenues

As the first quarter of 2023 draws to a close, advertising revenues for many major tech companies are also recovering. Amazon, for example, saw a 21% increase in ad revenue to $9.5 billion in the first quarter. Meta also saw ad revenues rise 4.1% to $28.1B, bringing its first revenue increase in almost a year. Smaller companies such as Pinterest also saw an increase of +5 %. 

What Caught Our Attention

Prime Day will probably take place on July 12th & 13th. The deadline for submission of Prime Day Deals is May 19th. This applies to all types of deals: Prime Exclusive Top Deals, Prime Exclusive Lightning Deals, and Prime Exclusive Best Deal.

Commentary: Amazon’s Q1 2023

Amazon published its Q1 2023 results at the end of April, which turned out better than experts had predicted. Below, we take a closer look at the company’s performance.

Amazon’s net revenue grew 9% year-over-year to $127.4 billion – driven primarily by Amazon’s advertising, marketplace (3P) and U.S. e-commerce businesses (in addition to its cloud business). In the latest quarter, Amazon’s international revenue, which had weakened recently, also returned to a steady +1% year-over-year (YoY) at $29.1 billion. For Q2 2023, Amazon expects a growth rate between 5% and 10% YoY.

All in all, the company beat analysts’ expectations for Q1 – but shares fell nearly 3% as the AWS outlook for Q2 2023 is uncertain. 

Amazon’s advertising business remains strong, growing 21% YoY. The company has invested in many new Ads features like videos to be able to market more ad space – and thus increase its profitability.

Interesting side note: Amazon Ads generates more than 1/3 of Meta’s revenue! The big players in the ad business again posted significantly lower growth than Amazon in Q1:

• Alphabet Advertising: – 0,2 % YoY, 54,5 Mrd. $
• Meta Advertising: + 4 % YoY, 27 Mrd. $

Amazon’s growth rate is very impressive considering the current economic circumstances in e-commerce. We think the group will continue to focus on profitability in the coming months – but so far the measures taken seem to be successful.

Fact of The Week

More than 60% of all Amazon customers in the EU5 and US markets visit the platform without having any specific intention to make a purchase. Only 16 % use the online marketplace for inspiration (source: International Amazon Shopper Report 2022, Remazing & Appinio).

Remdash: Questions & Reviews

Tracking questions & reviews offers a tremendous opportunity to understand your customers’ needs.

• Track all of your historic and new questions & reviews
• Respond to customers’ questions and increase the trust in your brand
• Export all data for your internal reporting and use the insights to improve your products

Interested in Remdash? 
Just click here to schedule a personal product demo with our team.

Top 5 Amazon Keywords

These are the top 5 most searched keywords by country from April 30 – May 6, 2023.

For the upcoming Mother’s Day, Amazon users in Germany, Italy, Spain and the US were increasingly on the lookout for gifts, while decorations for Coronation Day dominated the top keywords in the UK. In Germany and the US, searches for series and movies also increased.