What Amazon Didn't Say

Amazon earnings report is out. Slowing topline...crushed the bottom line. Yawn...

It’s the commentary that’s always more interesting to me. On the retail side, Amazon is doubling down on grocery retail with a third round of price cuts at Whole Foods and announcing plans to expand metro coverage into more cities this year, currently standing at 75 metros with delivery and 30 with pick-up. Winning online grocery is a critical battle front for ecommerce in US in particular, with every major retailer now racing to capture grocery trips that have shifted from brick and mortar to online ordering.

And they're working on shipping faster and more conveniently. On the analyst call they said we can expect Prime 1-Day shipping as the new norm soon. This makes sense as other retailers have caught up to 2-day and store-based distribution from Walmart, grocery retailers and others threatens 1-day and same day Click and Collect or BOPIS. But they're also aware not every shopper needs their orders as fast. Amazon Day allows Prime customers to receive all packages on one day per week, reducing waste for consumers and improving Amazon’s efficiency. Sort of like how they snapped all Subscribe and Save orders to one date per month years ago. They also announced Key by Amazon expansion, now including secure areas, cars and garages. Finding secure ways to deliver packages is important to overcoming ever present theft issues. 

But very little for 1P and 3P brands/sellers. Our Amazon analyst, Jack O’Leary, noted that Amazon “…is using its growing third party business, and the success of its millions of 3P sellers, in public communications as an example of Amazon supporting economic prosperity for small businesses. This is a direct counter to current anti-competition narratives driving regulatory scrutiny that could damage Amazon in the long term.”

However, they said nothing more specific than that. No mention of the efforts to battle counterfeits and fake reviews. These are critical topics that Amazon needs to address - they risk the trust millions of shoppers place in them today and could do more harm to Amazon than any external threat. The unfathomable part is they are entirely solvable with existing technology!

The vendor community also continues to buzz about the 1P shake up a few weeks ago. The Amazon One Vendor program rumor mill is in full production - but exactly what it will mean for 1P Vendor Central, 3P Seller Central and the fate of the vendors and sellers themselves isn't widely understood. It’s not a surprise that Amazon isn’t talking about this in their earnings report but it is something brands need to be aware is coming soon.

Sometimes what isn't said is just as interesting as what is said!

Anything else you noticed of interest in what was...or was not...said?