Monthly Amazon Update – January 2020

Expansion

Now that 40 percent of Amazon’s fleet of delivery vans already runs on renewable energy, Amazon is pushing ahead with its plan to increase this figure to 100 percent by 2030. To this end, Amazon has ordered 100,000 delivery vehicles from the electric vehicle start-up Rivian, which is the largest order for electric vehicles to date. In addition to Ford, Amazon is already an investor in the startup, which specializes in electric pickups and trucks. The first vehicles will be delivered by 2021, with 10,000 deliveries planned for 2022. According to Amazon boss Jeff Bezos, the fleet of 100,000 vehicles should be fully operational by 2024. Link

Amazon is planning to enter the luxury fashion sector in the near future with a new platform based on the concession model. Brands are to be given prominent positions on the platform, whose store design is to be fully controllable. Likewise, the decision of offered products as well as possible discounts should also be completely up to the brands. For the launch of the platform, 12 brands are already on board, but remain unnamed. The new luxury platform will initially serve exclusively US customers, but expansion into other countries is possible in the future. In Arizona, the company is already building its own warehouse, and a 100 million US dollar advertising campaign is also planned. Link

Will it be possible to make payments by waving hands in the future? Amazon received a patent for a “contactless biometric identification system” that includes a “hand scanner that generates images of the palm of the user’s hand”. It is said that in the future this will be used to develop terminals that will allow customers in shops to make payments by hand gesture if the handprints are linked to the credit card data. New payment concepts are nothing new for the industry: After Apple introduced contactless payment with NFC over Apple Pay in 2014 and Amazon invented automatic payment on leaving a store with Amazon Go in 2017, interest in simpler payment methods is strong. Link

Marketplace News

A new function, which is already being rolled out extensively in many countries such as the USA, Mexico, Japan and also in Germany, now also shows international customer reviews on Amazon product pages. Amazon’s move follows its efforts to increase the number of reviews on its website. A machine translation already translates English, Spanish and French, among other languages. Link

New advertising option via Alexa: With ‘Branded Utterances’, advertisers have the possibility to integrate voice commands into TV campaigns that are played out via Amazon’s Fire-TV Apps and IMDB TV and activate branded Alexa skills. This should result in more customer loyalty and brand awareness among customers. For ad bookings of at least 750,000 US dollars, Amazon itself takes over the creation and technical implementation of the special Alexa skills. Link

Sellers can now register for the new marketplace on Amazon.nl. Amazon FBA will also be available for sellers who want to use it. The Dutch marketplace will be Amazon’s sixth in Europe after the UK, Germany, France, Italy and Spain, after Dutch customers have been able to buy products via a Dutch version of Amazon.co.uk since 2016. Link

In the record year 2019, German online trade generated sales of 72.6 billion euros. Marketplaces grew by 13 percent, multichannel providers and pure online providers by around 11 percent each. Online marketplaces accounted for 47 percent of e-commerce sales, while multichannel providers accounted for 35 percent and pure Internet providers for 15 percent. For the goods sector, the German E-Commerce and Mail Order Association (Bundesverband E-Commerce und Versandhandel) expects further growth in 2020 and forecasts sales of 80 billion euros. Link

Following the launch of Amazon DSP campaigns in the United Arab Emirates on Amazon.ae in September 2019, sponsored ads (products and brands) and stores for the UAE region are now also available. Link

Abolition of Plus products? Amazon.com now delivers Prime items with a price below $1 free shipping. The push to include more FMCG items such as pencils, deodorant or shower gel in the range should lead to an increase in individual products costing less than 5 euros, especially in the drugstore category. Until now, these were only available as ‘plus products’ from an order value of at least 25 euros. The change will most likely result in millions of low-price products being added to Amazon’s range in the future, closing the final gap with the retail trade. Link

As of April 1st, Amazon announces an increase in the fees for its FBA service shipping through Amazon, also for merchants in Germany. Shipping fees are expected to increase by 9 percent on average. The reason for this is the increased costs. Link

Strong fourth quarter: Amazon increased its sales in Q4 2019 by 21 percent to 87.44 billion US dollars. Amazon CEO Jeff Bezos announced that more customers than ever before signed up for Prime this quarter and there are now 150 million paying Prime customers worldwide. Following the announcement of strong quarterly figures, Amazon’s share price rose 11 percent after market close on January 30, 2020. Link