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Sellers gathered at Amazon’s annual Accelerate conference on Sept. 14-15 got a look at a host of new features designed to help increase sales and improve operations.
Following the rollout of new marketing tools to begin the conference, Amazon debuted analytics and delivery capabilities on the backend of the event.
“We’re focused on supporting sellers as they work to build and grow their business,” said Benjamin Hartman, vice president of Amazon North America Selling Partner Services, at the conference. “The tools we’re announcing today are a direct result of seller feedback and target every step of their Amazon sales funnel, from new customer acquisition to increased lifetime value.”
Here’s a look at the new tools:
Veeqo: Free shipping software
Following the acquisition of Veeqo earlier this year, Amazon launched a new version of this tool that provides free multichannel shipping software to third-party sellers. Veeqo’s capabilities include:
- Connect sales channels: Sellers can use this to connect Amazon, eBay, Etsy, and Shopify, and access discounted rates on UPS, U.S. Postal Service, DHL, and FedEx.
- Rate shopping: This feature imports seller orders and automatically finds the lowest available shipping rate based on size and weight.
- Automation: Sellers can bulk ship up to 100 orders, and send automated tracking emails.
Amazon plans to soon launch features for this software including:
- Inventory sync across Amazon, eBay, Etsy, and Shopify.
- Track and Purchase Inventory across locations, manage bundles and email purchase orders to suppliers.
- Digital picking for orders using the Veeqo scanner and mobile app.
- Reporting and Forecasting that helps sellers make stock decisions using inventory performance, historical stock and financial information.
Manage Your Experiments
Brands can use this tool to run A/B tests on titles, main images, and A+ content in a product detail page to see what performs best. With new updates, brands can also A/B test bullet points and descriptions, and review machine learning-based recommendations for product images and titles. A/B tests can also be automated with a tool that auto-publishes successful experiments.
Search Analytics Dashboard
Launched in early 2022, this tool now has an insights dashboard that provides sellers with anonymized data to better understand customers’ interests and shopping habits. This includes the ability to download search query and catalog performance data, as well as ASIN-level details.
“This new capability enables brands to easily assess marketing campaigns to identify areas to drive repeat purchases and acquire new customers—either directly from within Amazon’s tools or by combining Amazon data with the seller’s own business data,” Amazon writes.
Product Opportunity Explorer
Introduced in beta in 2021, this tool allows sellers to gauge whether a new product will gain traction, and forecast its sales potential. Amazon has added a feature called Customer Reviews Insight, which helps sellers use feedback from reviews and ratings as they determine which features to build and upgrade for new products.
Marketplace Product Guidance
First announced in 2021, this tool has now been upgraded to include a feature that will show US sellers which products are likely to be in high demand in France, Italy, and Spain. Recommendations are personalized and ranked based on a calculation by machine learning models.
Trending in Operations
The company is pulling back after breakneck pandemic expansion. Will it sacrifice the shopping experience along the way?
Amazon is in a period of rebalancing.
The company has long scaled at a relentless pace as it sought to not only provide a marketplace for commerce, but the infrastructure that enabled it, as well. Amazon found another level of overdrive over the last two years, as demand spiked to unseen heights during the pandemic and the company tried to build to keep up.
This wasn’t necessarily a period that saw the kind of invention that Jeff Bezos made an existential tenet of the company, but it nonetheless seems to be shaking out as a cycle that included risk and fallout.
In this case, the risk was not a new device like a smartphone or a move to bend the future to Amazon's will like drone delivery. Rather, it was an expansion that took its already-vast operations to new heights.
Nowhere was this more evident than the company’s logistics network. As CEO Andy Jassy described it to analysts Thursday on an earnings call, the company doubled the size of a fulfillment network it took a quarter-century to build in two years. It also built out a last-mile delivery network that was the size of UPS, which is one of the top two carriers in the U.S.
In 2022, all of that expansion ran into 40-year-high inflation, war in Ukraine and a pullback in demand for goods amid reopening. The company first admitted the problem: It had overbuilt.
But the solution is not to tear down. It had to keep expanding as only Amazon does, while still cutting back in a period of “belt-tightening,” as executives have put it.
That’s evident in watching developments out of the logistics network alone. Amazon pulled out of some areas, and canceled plans to expand into some new warehouses. Yet, as Business Insider reported, it still added 79 million square feet – a footprint that is equal to half of next-closest competitor Walmart’s entire distribution network. It is also expanding Buy with Prime, a new program that will allow direct-to-consumer brands to offer Prime benefits, and, by extension, access to Amazon’s logistics network. Another service, called Amazon Warehousing and Delivery, is designed for upstream storage, necessitating more space to be made available in the network.
At the same time, it will seek to keep doing more for consumers.
Jassy indicated as much when he was prompted to outline his priority areas. Beyond cost-cutting, he said speed is the second highest priority for Amazon. As if to conform this, he said later in the call that one-day shipping is getting off the ground in North America.
Selection is another priority area. At Amazon, that phrase translates to a few things, but top of mind is “expanding the third-party seller marketplace.” Third-party sellers accounted for 59% of sales in Q4. Beyond sales, Amazon’s work with the sellers who post their products on the marketplace is also lucrative for the company. Amazon allows these sellers to tap its logistics network to offer Prime through the Fulfillment by Amazon program. Its business segment called third-party seller services grew 20% year-over-year in the fourth quarter, right in line with the massively profitable cloud computing division Amazon Web Services.
Price, Jassy said, is another area of importance, especially with the consumer pullback on discretionary purchases being observed amid inflation.
“I think pricing being sharp is always important,” Jassy said. “But particularly in this type of uncertain economy, where customers are very conscious about how much they're spending, having the millions of deals that we put together with our selling partners in the fourth quarter was an important part of the demand that you saw.”
Finally, Jassy cited a priority of improving the customer experience. He said Buy with Prime would give subscribers the ability to use their benefits across the web, and noted that virtual try-on for shoes brings change to the shopping experience.
But it’s in this area that the tradeoffs that may be happening under the surface may rear their head again. GlobalData Managing Director Neil Saunders noted that online shopping generally is becoming “more difficult" on Amazon.
“While the Amazon marketplace is far from a terrible place to shop, it has become more complex and cluttered with a multitude of products, delivery options, and prices levels for shoppers to sift through,” Saunders wrote in note released at the time of the earnings call. “The result is that impulse buying has dropped and that more people are migrating away to other retailers. This is not yet a serious problem as erosion has only happened at the margins, but it is something Amazon will need to address and arrest to prevent further decline.”
Taking a rhetorical step further, the journalist John Hermann wrote this week that a “junkification” of Amazon is taking place, while arguing that “everything is going according to plan" for the company.
He placed the growth of the third-party seller marketplace at the center of this trend. But it also comes as Amazon grows its advertising business, with many taking note of a growing number of ads on the platform. The company also wants to keep growing Prime, and is now using content such as Lord of the Rings and NFL’s Thursday Night Football as key acquisition channels. Both had “record” signups of new Prime members, CFO Brian Olsavsky said.
“We see a direct link between that type of engagement and higher purchases of everyday products on our Amazon website,” he said.
It will have to do each of these things at once, while entering a period that will require it to be “more targeted with its growth ambitions,” as Saunders put it.
"Since its inception, Amazon has had a culture of throwing dollars at many different things to see where they led and what they could learn," Saunders said. "That approach worked well for a younger, fast-growth business. It works far less successfully for a more mature entity. In our view, management deserves credit for recognizing this and quickly responding. However, the shift requires a lot of care because Amazon needs to find a new balance between being ambitious and innovative and being more frugal with its spending – which will be very challenging."
Jassy said the changes of the pandemic made its logistics a "different network." That may be true of the whole company. Rather than an isolated cycle of overbuilding and pulling back, this may prove to be a period that changes Amazon altogether. The bets will still be there, but the risk will be magnified with fewer dollars that don't pay off to go around. As hinted by the logistics buildout of the pandemic and even Buy with Prime, they also may look more operational.
Less delivery robot, more delivery optimization.
As Jassy put it: “We're going to be very thoughtful about how we streamline our costs, and I think you see a lot of that, but we're also going to continue to invest for the long term.”
The recipients of those investments will say a lot about where it wants to head in this next year.