This was Amazon's year 2022

The most important Amazon developments in 2022

Last year, Amazon’s sales returned to normal growth without the “Covid boost”. The top-selling markets were still the U.S, Japan, Germany, and the UK. The only new Amazon marketplace added in 2022 was Belgium, with Colombia, South Africa, Nigeria, and Chile set to follow this year. One of the strongest branches of the company is Amazon Advertising, which is now growing faster than the advertising business of competitors Alphabet (Google) and Meta (Facebook). The main growth driver was the expansion of the available advertising network outside the company’s own platform. The Amazon CPC therefore remained fairly stable in 2022 and was significantly more favorable than in 2021. Amazon has also been supporting product purchases on other sites, e.g. brands’ own online stores, since last year through “Buy with Prime” – and has thus developed in the direction of D2C (Direct To Consumer). The retail group wants to pick up on the trend topic of social commerce with its new photo and video feed “Inspire,” which is supposed to bring a TikTok-style feeling to the Amazon app.

From hyper growth to cost optimization

To remain profitable and competitive in 2022, Amazon has also had to adapt to macroeconomic challenges. To combat high inflation and declining sales, the e-commerce giant sublet its warehouse spaces, hosted additional sales events, and imposed hiring freezes. Last year was Amazon’s first without Jeff Bezos and its fair to say, was one of mixed success. Experts are now debating whether the company is increasingly losing sight of its “day one” mentality and absolute customer focus due to pressures on profitability.

Amazon takes over grocery shoppers from Walmart

After being unable to significantly increase its grocery shopping numbers, even after buying Whole Foods in 2017, Amazon is now using its Subscribe & Save program to attract more and more U.S. customers in this sector. Their focus on this market could be due to the fact that it is more resistance to consumer austerity measures, even during a recession.

U.S. online sales up 10.6% in holiday shopping season

E-commerce sales in the U.S. grew 10.6% between November 1 and December 24, 2022, according to Mastercard. That’s slightly less than the 11% growth over the same period last year. Growth in total U.S. retail sales over the holiday season is also slightly lower than last year (7.6% vs. 8.5%), but was still above analysts’ expectations.

Shopify launches modular system “Commerce Components”

The online shop platform provider Shopify has recently made individual components of its platform available that can be integrated into existing store infrastructure. The aim is to attract large companies and corporations that often already have existing back offices and do not need a completely new system, but only individual store features. Started as a simple all-in-one solution for e-commerce startups, Shopify thus has a new target group. Toy manufacturer Mattel is already using “Commerce Components”.

Live online shopping as the future of e-commerce

One of the viral phenomena in 2023 is predicted to be social commerce. Ad spend on social media is expected to slow to 12% annual growth in the U.S over the next few years, down from 30% previously. E-commerce sales on social media, on the other hand, are predicted to rise 20% annually. TikTok has had interactive livestreams with an integrated online shopping function for some time, and Amazon (“Inspire”) and YouTube, among other platforms, have also recently introduced tools for this specific purpose.

In the last newsletter, we reported on the launch of Contextual Targeting for Sponsored Display Video Ads. Now it has been announced that Amazon is also bringing the feature to its Demand Side Platform (DSP) in EU5 markets this year. The ads are played out via Contextual Targeting when a customer is browsing the web in an environment that matches the content of the product.