Huisman was already well-established as a provider of heavy construction equipment for the energy industry. But to better help its customers maintain their equipment in top shape and avoid any costly downtime, the family-owned company, founded in 1929, realized it needed to go digital — and in a way that was helpful to customers who were often out of internet access range.

Maaike de Rover, program manager, digitalization, Huisman

Going digital — enabling customers to order parts and service and view technical manuals from computer devices in remote locations at sea — makes Huisman’s products and services far more accessible and the company far more efficient and proactive in serving customers.

“The ultimate goal is to grow our business and stay relevant for our clients,” says de Rover, program manager, digitalization.

Moving toward predictive maintenance

Moreover, Huisman’s digital applications are putting its Services division into the position to “move from preventive maintenance to predictive maintenance,” she says, with online dashboards designed to alert customers when their equipment may be due for maintenance and new parts.

Headquartered in Schiedam, Netherlands, with worldwide production and service facilities, Huisman worked with digital agency Fenego to deploy the Intershop Commerce technology platform. Intershop, which launched its first ecommerce platform in 1992, “combines the functionality of a B2B shop with the user-friendly aesthetics of a B2C platform,” according to Martijn Reissenweber, director of Huisman Services.

But the new digital technology layout is “more DXP than just an ecommerce platform, it goes far beyond ecommerce,” says de Rover, using the letters for digital experience platform.

In addition, Huisman manages customer and financial data and product information with an Isah ERP system, a Windchill data management application, and Google Analytics. And it uses an image designing tool for displaying 3D product drawings.

To make the digital platform more useful for customers when outside of internet access, de Rover says Huisman worked with Intershop and Fenego to deploy the commerce technology as a progressive web application. That configuration lets customers continue to engage through various mobile devices with downloaded web content, including product and order details, account activity, and service records, even when they have poor or no internet access in remote sea locations, such as windfarm construction sites.

Vessel-mounted Huisman cranes at a windfarm construction site.

Engaging customers via myHuisman

Huisman’s digital strategy is to make it easier for its customers aboard vessels to order parts and technical services through the manufacturer’s new digital portal, myHuisman. The portal also lets them access a broad scope of technical manuals, 3D product images, and other resources with detailed specifications, place orders for replacement parts, and receive technical help online.

Personalized content and service was crucial for Huisman to maintain a helpful digital interaction with customers at different types of companies, regardless of where they were operating and their level of internet access, de Rover says. She notes that a typical cost of equipment out of service for maintenance or repairs can run $200,000 or more per day.

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“Our industry is based on relations and personal contact with people who may work 30-40 years for the same company,” she says. “So, before we started building this platform, I formed a customer advisory board … and the clients helped us build the platform.”

Among myHuisman’s features are:

• Dedicated parts shops for customers with highly customized equipment. “It’s quite important for them to know what specific items are available for their equipment,” de Rover says. For example, she notes that a 2,600-metric-ton leg-encircling crane can have over 10,000 serviceable items and parts available for purchase, and a customer can click to see all the parts that are available, the price and the order lead times.
• Access to a technical digital library of what are typically huge volumes of product manuals and documents related to the purchase and operation of Huisman equipment.

In the past, ships outfitted with Huisman cranes or other products would carry a full ship container stocked with paper manuals and documents. Next came CD-ROMs, which offered helpful 3D imaging used for maintaining and repairing equipment, but intermittent internet access limited their usefulness.

The new library available through myHuisman lets customers download materials online and use them with full interactive features even without internet access.

• An online services ticketing system, which customers can use aboard vessels to arrange to receive technical assistance from Huisman technicians and engineers. Customers can also check other users’ questions and their status and review Huisman’s recorded replies.

In some cases, a Huisman engineer will travel by air and water to arrive at a client’s vessel to conduct onboard service, but to limit the expense of such travel, Huisman has developed alternate remote support services using such tools as photo-taking drones and the enterprise version of smart glasses to share images of onboard equipment with land-based engineers and technicians.

Keeping track online of made-to-order cranes

Later this year, Huisman also expects to launch a digital file management system for keeping customers up to date on the status of customized cranes and other equipment as they’re in production. De Rover notes that the production process can take two to three years, making it difficult to regularly maintain, share and organize project documents with customers on typically highly complex, made-to-order products.

For Huisman’s largest and most ecommerce-mature customers, the manufacturer is also working on providing direct connections from companies’ enterprise resource planning or plant maintenance systems to the myHuisman web shop for fast and efficient ordering of products.

De Rover says there is a significant growth opportunity as Huisman onboards more customers to myHuisman for routine activities like scheduling service calls, freeing up its salespeople and account managers to spend more time on helping these companies match their needs to Huisman’s product offerings.

Sophie du Mortier, marketeer, Huisman

Going forward, Huisman is developing a technology application designed to let customers remotely monitor on myHuisman the construction progress of cranes they’ve ordered.

“Once they buy a crane, they can monitor their equipment’s complete production process,” says Sophie du Mortier, marketeer for Huisman. “Customers can collaborate with Huisman on design and test documentation. They will have full insights in planning. Transparency is key.”

Huisman is also developing a myHuisman online performance dashboard that enables condition-based monitoring, a method using information from equipment-embedded sensors to give customers information on required maintenance.

“They have a complete overview of the status of the equipment,” du Mortier says. “And we are working towards a servicing model in which we can use this data to provide operational advice.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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It was “a phenomenal year for Shopify,” said president Harley Finkelstein in an earnings call with investors this week.

In North America, 45 of the Top 1000 online retailers use Shopify as their ecommerce platform. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in the region by annual web sales. In 2022, those 45 online retailers combined for more than $8.29 billion in web sales.

Shopify revenue, profit and GMV grow in Q4 2023

In its fiscal Q4, Shopify revenue grew 24% year over year to $2.1 billion. Excluding Shopify’s logistics business, that growth rate shifts to 30%. It also marks the third consecutive quarter that growth (excluding logistics) has been greater than 25%, said Jeff Hoffmeister, chief financial officer. For the full year, Shopify revenue increased 26% over 2022 to $7.1 billion.

Of that $2.1 billion in Q4, $1.1 billion was gross profit. That’s 33% year-over-year growth in Q4 profit. Shopify gross profit in 2023 grew to $3.5 billion. That’s a 28% increase from $2.8 billion in 2022.

Meanwhile, Shopify GMV grew 23% in Q4 to reach $75.1 billion. That’s $14.2 billion more than Shopify’s GMV in Q4 2022. It’s also the largest quarterly GMV growth rate since the pandemic-driven rates in 2021, Hoffmeister said. For the full year, Shopify GMV grew 20% — or 38.7 billion — over 2022, to reach $235.9 billion in 2023.

In terms of channels, Shopify revenue from offline sources, which includes offline subscriptions and point-of-sale hardware, was $441 million. That’s more than five times what it was four years ago, Finkelstein said.

More than 70% of Shopify’s online checkouts in 2023 came from mobile devices, Finkelstein said. In Q4, the Shop App “nearly reached” $100 million in GMV in a single month, he said not specifying the exact figure.

Internationally, cross-border GMV was approximately 14% of total GMV in Q4. Europe, the Middle East and Africa represent 27% of Shopify’s total merchant base. More than $1.2 billion in Shopify revenue comes from sales in the region.

Shopify also noted growth in its B2B channel.

The biggest sales period: Black Friday through Cyber Monday

In the four days from Black Friday through Cyber Monday, Shopify merchants collectively generated $9.3 billion in sales, Finkelstein said. That’s 24% year-over-year growth. About 61 million consumers worldwide purchased from brands that use Shopify as their ecommerce platform, he said. More than 55,000 merchants had their highest-selling day ever on Shopify in that period, he added.

Part of that stemmed from scaling the platform to accommodate more traffic, Finkelstein said. Shopify handled, on average, 967,000 requests per second, he said. That’s the same as 58 million requests per minute. It’s also almost 80% higher than Shopify’s peak traffic two years ago, Finkelstein said.

Cyber Monday is still the largest online sales day in the U.S., with web sales reaching $12.4 billion in 2023, according to Adobe Analytics data. Cyber Monday 2023 online sales grew 9.6% over 2022’s $11.3 billion. Black Friday is the second largest at $9.8 billion in online sales. That represents 7.5% growth over 2022’s $9.12 billion.

Shop Pay and Shopify merchants

Finkelstein said that compared to 2022, Shopify has 35% more merchants from outside North America using its ecommerce platform. It has added brands including Dollar Shave Club, Authentic Brands Group, Buy Buy Baby, On Running and more, he said.

“In April, an external study by a big three consulting company confirmed that Shopify’s overall conversion rate surpassed the competition by up to 36% and on average is 15% higher than others,” Finkelstein said.

And when consumers use Shop Pay, conversion can grow by half, he said. More than 150 million users have signed up for Shop Pay, as of Q4 2023. For the quarter, it facilitated $18 billion in GMV. That’s up 58% year over year for the quarter and up 50% for the full year.

Shop Pay has facilitated a cumulative $127 billion since launching in 2017, according to Finkelstein.

Shopify 2023 highlights

“We cannot talk about 2023 without mentioning AI,” Finkelstein stated. “We launched our suite of AI-powered tools known as Shopify Magic, an AI shopping assistant on our Shop App and further embedded AI tools within Shopify to increase productivity and streamline administrative tasks that have saved our merchants and our team thousands of hours of work, enabling us to ship faster and make great decisions quicker.”

The ecommerce platform brought nearly a dozen AI-enabled tools to its Shopify Magic product suite in 2023.

Shopify also partnered with Amazon.com Inc. to release the “Buy with Prime” app for Shopify merchants. The deal gives merchants the choice to offer Buy with Prime directly within their Shopify Checkout. This provides Shopify merchants access to Amazon’s logistics network.

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Adrien Nussenbaum, co-CEO, Mirakl

2023 marked a “year of maturity for Mirakl,” says Adrien Nussenbaum, co-founder and co-CEO. “Not only did we significantly increase our annual recurring revenue … but we are now financially self-sustaining.”

Nussenbaum adds that Mirakl powers ecommerce operations for more than 450 enterprises. They include B2B companies Airbus Helicopters, pharmaceuticals distributor Cencora (formerly known as AmerisourceBergen), Mitsubishi Electric, restaurant supplier Parts Town and Toyota Material Handling. Among its retailer clients, Mirakl counts Macy’s, Best Buy, Kroger and Saks Fifth Avenue.

Mirakl-powered B2B marketplace sales

Mirakl says the gross merchandise volume on the Mirakl Marketplace Platform, which client companies use for first-party and third-party ecommerce sales and drop-shipping, grew 50% year over year in 2023 to $8.6 billion.

In addition, Mirakl generated a 20% increase in annual revenue to nearly $160 million.

Nussenbaum says Mirakl has been expanding and upgrading its digital commerce and marketing products and services in several areas to help online sellers meet rising expectations of personalized and helpful online buying journeys.

For example, Mirakl introduced last year a program for integrating AI technology across several Mirakl technology platforms:

• Mirakl Marketplace.
• Catalog platform for onboarding sellers’ product information.
• Target2Sell content personalization.
• Target2Sell content personalization.
• Mirakl Ads online advertising program for promoting products on e-marketplace pages.

Mirakl says that, through a feature developed on generative AI, Mirakl customers “can enhance the data quality and completeness of product catalogs, boost search engine rankings, and increase conversions automatically by optimizing product titles, descriptions and attributes.”

It adds that Mirakl has also developed AI-powered language translations to help online sellers “expand their business into new territories.”

In addition, Mirakl launched in 2023 the Mirakl Payout for online payment transactions and a global arrangement with marketing and communications firm Havas Group.

In a sign of what it expects more robust growth to come, Mirakl said it achieved a record $1 billion in monthly GMV in November. And it noted that more than 30 Mirakl-powered marketplaces surpassed the $100 million GMV mark last year, including several that surpassed $500 million.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s MSC Industrial report.

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Machinery Partners B2B marketplace

A total of $8 million will come from Armory Square Ventures and joined by Pritzker Group, two venture funds with expertise in the industrial technology space, Machinery Partners says. Other investors include RiverPark Ventures and Contour Venture Partners. Pacific Western Bank provided an additional $3 million in venture debt and some money from previous investors such as:

• Euclid Ventures
• One Way Ventures
• Techstars Ventures

Venture debt or venture lending is a type of debt financing provided to venture-backed companies by specialized banks or non-bank lenders to fund working capital or capital expenses, such as purchasing equipment.

“This funding will equip Machinery Partner to further expand across the country and become the go-to destination for heavy equipment manufacturers to sell to construction, agriculture and recycling companies,” the company says of its B2B marketplace.

Machinery Partners, based in Boston, currently does business in 35 states. The B2B marketplace offers procurement, financing, and support for a wide range of industrial equipment and heavy machinery.

In addition to selling in 35 states, it plans to expand operations throughout the country and internationally. In doing so, the company says, it hopes to support local construction and infrastructure development.

“Machinery Partner has brought a new approach to heavy machinery procurement designed to support industrial businesses facing labor shortage and needing more specialized equipment,” says Machinery Partner co-founder and CEO Clement Cazalot. “With this funding, we will continue to expand our offerings for our customers, support new factory partners, and increase availability to disrupt the $580 billion global heavy equipment industry.”

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Alibaba owns the world’s two largest online marketplaces by gross merchandise value (GMV), Taobao and Tmall. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by GMV. Tmall ranks No. 2. Both operate in China.

Eddie Wu, CEO, Alibaba Group

Alibaba revenue in fiscal Q3

The lion’s share of revenue was in Alibaba’s China retail ecommerce operations Taobao and Tmall, which grew combined revenue 1% to $17.43 billion. At Alibaba’s China B2B ecommerce site, 1688.com, revenue increased 23% to $747 million. Sellers on 1688 include include such U.S. manufacturers as Avnet, 3M and Stanley Black & Decker.

But Alibaba’s sharpest ecommerce revenue growth came in its International Digital Commerce Group, where retail commerce revenue surged 56% to $3.28  billion and wholesale climbed 8% to $740 million, for consolidated international growth of 44% to $4.02 billion.

Alibaba’s international retail commerce sites include Lazada, AliExpress, Trendyol and Daraz. The company conducts its international wholesale sales through its Alibaba.com B2B ecommerce site.

The IDCG is headed by its CEO, Fan Jiang. The IDCG ‘s chairman is J. Michael Evans, a former vice chairman of investment bankers Goldman Sachs who joined Alibaba Group last year as president.

Alibaba also reported an 86% revenue increase in its Cloud Intelligence Group and a 24% increase to $4.01 billion in its Cainiao Smart Logistics Network.

Investing to drive Alibaba’s growth

CEO Eddie Wu said Alibaba intends to drive stronger growth across its operations.

“Our top priority is to reignite the growth of our core businesses, ecommerce and cloud computing,” he said today in a statement about its fiscal third quarter. “We will step up investment to improve users’ core experiences to drive growth in Taobao and Tmall Group and strengthen market leadership in the coming year. We will also focus our resources on developing public cloud products and sustaining the strong growth momentum in international commerce business.”

Alibaba said Q3 net income fell 77% to $1.51 billion. It attributed the decline to “impairment of intangible assets of Sun Art and impairment of goodwill of Youku.”

Alibaba earnings

For the nine months ended Dec. 31, Alibaba reported:

• Taobao and Tmall Group China retail commerce revenue increased 5% to $45.94 billion.
• China wholesale commerce revenue increased 13% to $2.19 billion.
• Cloud Intelligence Group revenue increased 3% to $11.38 billion.
• International retail commerce revenue grew 62% to $8.36 billion
• Alibaba international B2B ecommerce revenue increased 6% to $2.22 billion.

In November 2023, Alibaba Group became the first Asian Internet technology company to join the World Business Council for Sustainable Development, a group of over 200 businesses, to support WBCSD’s drive to make global value chains more sustainable.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. 

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Alon Partuk, CEO, Octup

Octup, an AI-driven ecommerce insights platform, says it “uncovers overlooked data” from brand manufacturers’ operations, including packaging, logistics and warehousing to last-mile delivery, returns management and customer support. In turn, it reveals opportunities to cut operating costs and boost profits, the startup says.

A group of investors led by Tal Ventures is backing Octup with $4 million in pre-seed funding. Octup says it will use the funding to “broaden the rollout of its 360-degree end-to-end discovery platform for ecommerce.”

Alon Partuk, founder and CEO, says he founded Octup in 2022 to “tap into deeper operational insights beyond standard metrics to uncover real opportunities,” adding, “We believe it’s crucial to understand how key business metrics like lifetime value and client retention relate to the quality” of a company’s service.

Prior to Octup, Partuk founded outdoor gear and apparel brand and merchant Apricoat, where he says he got the inspiration to develop Octup. He remains a director of Apricoat.

Octup says its technology helps global brands across such product categories as apparel, supplements, consumer electronics, skincare, and cosmetics jewelry.

John Michael Fabrizi, president and chief operating officer of outdoor apparel and hiking gear brand Coalatree, says in an Octup press release that Octup’s technology has helped Coalatree produce a 14% increase in customer retention, a 12% reduction in cost per order, and 9% revenue growth.

Fabrizi adds that, prior to Octup, Coalatree “grappled with data silos and missed opportunities due to disjointed insights across platforms, which limited our revenue potential.” He says Octup’s “user-friendly platform bridges these gaps, enhancing cost efficiency and profits.”

Ron Ostroff, the founder and managing partner at Tal Ventures, says his firm backs Octup for its ability to deliver “transformative benefits to ecommerce businesses, cultivating substantial growth and bolstering profitability.”

Octup says its financial backers also include Bullet Ventures, HCS Investors Group, World Trade Ventures, and the founders of unicorn technology companies Trax and Rapyd.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Yikun Shao, head of supply chain for North America, Alibaba.com

Businesses have been carefully watching the state of global supply chains as they have had to maneuver around obstacle after obstacle to ensure they meet the increasing demands of customers. In 2024, businesses will continue to feel the brunt of existing challenges, as well as meet new ones, and it will be critical to anticipate and find new ways to manage these issues while living up to customer expectations.

Of note, nearly four in ten (38%) small businesses think the global supply chain outlook will have a negative impact on their business, according to an Alibaba.com survey, so it will be important to watch for changes throughout the year and monitor for potential concerns.

One of the most pressing challenges the industry faces is a shift of issues from the supply to the demand side. On the supply side, more raw materials are available, and there are fewer transportation obstacles.

However, on the demand side, there has been rising inflation globally, and backlogged inventory, especially in the U.S. and E.U., has led to a decrease in demand, compounded by decreased demand for certain products. While the U.S. saw a return to pre-pandemic consumer holiday season spending in 2023, businesses may still want a more conservative approach and order products in smaller quantities, meaning that meeting shipping requirements may become more difficult. Demand is not able to meet the products that the supply side is able to provide.

On top of this, recovery from the COVID-19 pandemic is ongoing as supply chains are still readjusting from related interruptions. There is more stability, but recovery takes time, especially as new challenges arise.

Mounting Concerns Businesses Should Monitor

Businesses are also facing a number of additional issues that could spell trouble for them throughout the year that they should be watching carefully:

• Cyber attacks: Threats from bad actors continue to be a growing issue. Small businesses are three times more likely to be targeted by cybercriminals, and the cost of cybercrimes to small businesses reached $2.4 billion in 2021.
• Labor and government shutdowns: 70% of small business owners say a government shutdown would negatively impact their business, and 93% say it would hurt their revenue. Additionally, labor strikes can also impact small businesses by disrupting vendors or shipping partners.
• Natural disaster events: With 2023 on track to be the hottest year on record and extreme weather events increasing, supply chains could be increasingly disrupted by natural disasters and unworkable conditions.
• Panama Canal disruptions: The drought in Panama, largely caused by the El Niño climate phenomenon, has caused major delays and bottlenecks for those in the logistics industry. Scientists believe climate change may be prolonging dry spells and increasing temperatures in Panama. As such, the situation has become dire and expected to continue into at least mid-2024, as the number of ships allowed through the canal will decrease into February.
• The state of the U.S. economy: 47% of small business owners feel the economy will get worse in the next 12 months, and 58% said their business is being impacted by higher interest rates.

It will be crucial for businesses to monitor these and other issues and adapt as necessary by tapping into innovative industry tools and resources.

Digital Tools Address the Changing Supply Chain Landscape

As supply chain and logistics trends continue to evolve, digital tools can make it easier to manage operations to ensure on-time deliveries. There are a variety of tools on the market that can help businesses stay up-to-date on shipping and inventory processes. Companies can also invest in data analytics programs to assess patterns in inventory management and customer demands. There are even technology offerings that can help model and then execute on needs as supply chains come under greater stress. The goal in utilizing digital solutions like these is to predict trends, streamline processes and increase efficiency no matter the current supply chain landscape.

To make the biggest impact, specifically engineered intelligent tools, like Alibaba.com’s Smart Assistant, are also available, and they can provide better insight into the sourcing process. They can include features surrounding supplier transparency, direct communication with translation, shipment tracking, protections for wrong or delayed orders, and digital inventory awareness. These functions allow businesses to keep tabs on their orders and adjust to changes to time orders accordingly and, most of all, have peace of mind when sourcing their products.

However, employing digital tools is just one avenue businesses can take for upping their supply chain game.

Alternative Shipping and Warehousing Methods

Thinking outside the box when updating your shipping practices can also help to increase efficiencies, meet the growing demand for faster deliveries and stay resilient during supply chain setbacks.

There is a newer phenomenon in the form of crowdsourced delivery. This allows businesses to scale their shipment operations and work with other businesses to achieve timeliness and efficiency in deliveries. This communal form of shipping will continue to grow and become highly utilized in the coming years as technology becomes more widely adopted.

Beyond crowdsourced delivery, the localization of supply chains is also helping keep things closer to home, reduce logistics costs and cut order fulfillment time for small businesses. Localization may take the form of strategically built warehousing networks to maintain inventory closer to major customer bases. Some businesses are also using third-party warehouses, but these can have numerous and complex restrictions, which are constantly evolving. With that in mind, regional warehousing could be a viable alternative.

The world of ecommerce logistics and supply chain is constantly changing, but digitization, localization and omni-channel distribution are the three areas of innovation that businesses should consider taking advantage of. New technologies are bringing more transparency to the process than ever before. While these trends are growing, it will be critical for businesses to stay vigilant and monitor for new innovations and supply chain developments in order to be ready to tackle future challenges and seize new opportunities to evolve and improve their supply chains.

About the author:

Yikun Shao is Head of Supply Chain for North America at international marketplace Alibaba.com.

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Full-year sales grew 12% to $574.8 billion in 2023, up from $514.0 billion in 2022.

Amazon ranks No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party GMV. Digital Commerce 360 has published the latest analysis of the industry as a whole within the 2023 Global Online Marketplaces Report.

How much did Amazon make in Q4 sales?

North American sales made up the bulk of revenue in the fourth quarter, growing 13% year over year to $105.5 billion. International sales, however, grew at a faster clip. The segment increased 17% year over year to account for $40.2 billion in sales. Sales from Amazon Web Services (AWS) grew 13% to $24.2 billion.

Operating income also grew in the quarter. It reached $13.2 billion in the fourth quarter, nearly five times the $2.7 billion in operating income Amazon recorded in the year-ago period. Net income totaled $30.4 billion, up from a net loss of $2.7 billion in Q4 2022.

Amazon records a successful holiday season

“This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” CEO Andy Jassy said in a statement. The online retailer said customers purchased more items on Amazon during the 2023 holiday season than in any previous season, culminating in a record-breaking Black Friday and Cyber Monday. 

Amazon customers ordered more than 1 billion items during the holidays, with 500 million of those orders coming from third-party sellers, it said.

During the same period, millions of new consumers signed up for an Amazon Prime Membership. Amazon has 176 million Prime members as of December 2023, according to research from Consumer Intelligence Research Partners (CIRP). That’s the highest level ever recorded by CIRP, which has monitored Prime membership since 2013. Membership is up about 5% from 168 million in December 2022, per CIRP. Those estimates are for Amazon customers with Prime membership, not households.

Amazon fulfillment improvements 

Ahead of the earnings release, Amazon announced results of fulfillment advancements in 2023 and plans to continue growing the area in 2024.

“The regionalization of our U.S. fulfillment network led to our fastest-ever delivery speeds for Prime members while also lowering our cost to serve,” Jassy said in a statement.

The ecommerce giant delivered 7 billion units by same-day or next-day delivery to Prime members in 2023. More than 4 billion of those deliveries took place in the U.S., and more than 2 billion were in Europe.

The number of items delivered on the same day or overnight grew 65% year over year in the U.S. in 2023, Amazon said. More than 70% of Prime orders in the U.K. arrived the same day or next day in the fourth quarter of 2023. Amazon celebrated its billionth same-day delivery in the U.S. in December.

“We’ve challenged every closely held belief for our fulfillment network and reevaluated every part of it, and found several areas where we believe we can lower costs while also delivering faster for customers. Our inbound fulfillment architecture and resulting inventory placement are areas of focus in 2024, and we have optimism there’s more upside for us,” Jassy told investors on Feb. 1.

Amazon will add incremental fulfillment capacity going forward, based on demand for same-day delivery sites and automation, said Brian Olsavsky, chief financial officer.

Amazon on generative AI

The company discussed its advances in generative artificial intelligence (AI) across the company in its earnings presentation, too. 

It announced the beta test of Rufus, a new generative AI shopping assistant trained on Amazon’s product catalog. So far, the assistant is available to a small subset of U.S. customers to answer shopping questions and make recommendations, Amazon said. It will roll out to all U.S. customers in a few weeks.

The retailer also introduced a generative AI tool that will allow brands to produce lifestyle imagery for advertisements, it said. 

Amazon also added generative AI capacity to Amazon Connect, the AWS cloud contact center, it said. Generative AI will give customer service agents suggestions on how to help customers and generate summaries of conversations, it said.

“2023 also was a very significant year of delivery and customer trial for generative AI or Gen AI in AWS,” Jassy said. “Customers are also excited about our approach to generative AI. Still relatively early days, but the revenues are accelerating rapidly across all three layers, and our approach to democratizing AI is resonating well with our customers. We have seen significant interest from our customers wanting to run generative AI applications and build large language models and foundation models, all with the privacy, reliability and security they have grown accustomed to with AWS.”

How did Amazon do financially in 2023?

For the fiscal fourth quarter ended Dec. 31, Amazon.com Inc. reported:

• Sales increased 14% to $170.0 billion, from $149.2 billion in the year-ago period.
• Amazon Q4 North America sales grew 13% to $105.5 billion.
• International sales grew 17% year over year to $40.2 billion.
• AWS sales reached $24.2 billion, growing 13%.

For the 12 months ended Dec. 31, Amazon reported:

• Amazon sales grew 12% to $574.8 billion, from $514.0 billion in 2022.
• Operating income reached $36.9 billion, increasing from $12.2 billion in 2022.
• AWS sales grew 13% to $90.8 billion.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Amazon earnings article.

How big is Amazon’s total ecommerce business?

Amazon.com is the largest ecommerce retail company in the world with $412.1 billion in annual web sales (excluding all marketplaces and B2B companies such as Alibaba). Amazon’s business model is multifaceted, as it is one of the world’s largest marketplaces (No. 3) with over $650 billion in total GMV and over $400 billion in third-party sales. Its AWS unit climbed over $90 billion in sales in 2023, and its advertising sector brought in another $46.9 billion the same year.\

During 2020, Amazon grew its ecommerce business by over $54 billion. That’s nearly 10 times the size of Nordstrom’s annual ecommerce revenue.

Amazon’s first-party sales (online store)

If we split out Amazon’s online store sales, removing subscription services and its third-party seller fees, Amazon would still be the largest ecommerce player in the world by over $100 billion, as China’s JD.com (second largest, excludes Alibaba) sells over $125 billion annually. Those who follow Amazon.com closely can easily see the growing sectors of the ecommerce giant’s business. Its online store is not among them anymore. In fact, Amazon’s first-party sales are the slowest growing business arm with a 3-year CAGR of only 5.5%. Meanwhile, its third-party seller fees have a 16.4% 3-year CAGR, Amazon’s advertising services have a 22.7% CAGR, and its subscription services have a 12.5% 3-year CAGR.

How big is Amazon Prime Membership revenue?

Amazon makes over $40 billion annually just from its subscription services. To put that into perspective, if Amazon sold nothing else — without a single first-party product on its site, and all it sold was subscription services — Amazon.com would rank as the third-largest online retailer in North America. That would still make it larger than Apple (No. 3 with $35 billion in 2022 web sales) and Home Depot (No. 4 with $22.4 billion in 2022 web sales). Moreover, even comparing it to the combined total revenues from Nike (No. 9), Costco (No. 6) and Chewy (No. 13), Amazon’s subscription services alone would still be greater.

How large is Amazon’s advertising business?

Amazon’s annual advertising revenue sits at $46.9 billion. This is equivalent to more than half of Walmart’s entire ecommerce operation and more than twice the size of Target’s online revenue. 

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D.G. Macpherson, chairman and CEO, W.W. Grainger Inc.

D.G. Macpherson, chairman and CEO, said on an earnings call today that the Endless Assortment business — which offers online sales without the full-service approach Grainger provides through its High-Touch Solutions via sales teams and Grainger.com — nonetheless expanded its presence last year with large as well as small and midsized customers. He added that Zoro was also updating its product assortment to improve what Grainger says had been an “unfavorable product mix” that led to a drop in Q4 gross profit margins.

W.W. Grainger Inc. is No. 11 in the Top 1000. The database is Digital Commerce 360’s rankings of the largest online retailers in North America based on annual web sales.

Grainger online sales

“The Zoro team has progressed on their strategy, expanding their assortment, attracting new customers and improving B2B customer retention,” he said.

Zoro’s Q4 sales rose 2.3% year over year to $264 million. MonotaRo’s Q4 sales increased 7.8% to $438 million. Combined Endless Assortment Q4 sales increased 6.0% to over $700 million.

Grainger’s total sales increased in Q4 by 5.1% to $3.997 billion and for the full year by 8.2% to $16.5 billion.

Macpherson added that Zoro continued to focus on a strategy of presenting a personalized product assortment, assessing price competitiveness, and “proactively communicating delivery times to highlight where we are advantaged.”

Regarding Monotaro.com, Macpherson said “they seem stronger with enterprise customers [and] continue to expand with small and midsize customers and are gaining operating leverage as they ramp into their distribution center in Davos.”

He added, “In January, I had the opportunity to visit MonotaRo and I was able to see that MonotaRo was supported by a tight partnership between the U.S. supply chain organization and the Japanese counterparts.”

In Q4, Endless Assortment “growth was driven by B2B customers across the segment as well as enterprise customer growth at MonotaRo, which was partially offset by declining sales to non-core, consumer-like customers at Zoro,” Grainger said.

Zoro added about 2 million SKUs in 2023, ending the year with 13.1 million, an 18% increase. It also counted at year’s end 5.17 billion registered users; MonotaRo counted 9.02 million.

Expanding DC space 35%

Grainger also announced today plans to open a 1.2-million-square-foot distribution center this spring in the Houston suburb of Hockley, Texas. Grainger says the new facility will house more than 250,000 industrial supply items, ranging from power tools to power transmission equipment, and employ about 400 people following its 2026 opening.

The Texas facility will follow the launch of two other distribution centers in Pineville, North Carolina, which is scheduled to open later this year, and in Gresham, Oregon, scheduled for 2025. Overall, Grainger says it is adding 3.5 million square feet of warehouse space, a companywide increase of 35%.

“These latest investments will strengthen our promise to customers who count on us to provide next-day complete orders to keep their operations running,” Macpherson said on the earnings call.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s W.W. Grainger report.

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In North America, 45 of the Top 1000 online retailers use Shopify as their ecommerce platform. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in the region by annual web sales. In 2022, those 45 online retailers combined for more than $8.29 billion in web sales. Retail clients include Fashion Nova (No. 115), Figs Inc. (No. 173), Nine West (No. 252) and Steve Madden Ltd. (No. 262).

These are the most important updates Shopify released in its Winter ‘24 Edition.

Shopify conversion updates

Shopify said it improved how it lists products with the biggest update to its product model in more than a decade. Now, products that come in multiple variations can be purchased under a single product listing. The updated model also reduces the time and effort that go into creating new product listings, Shopify said. The product page can now automatically categorize listings by features like color and size, eliminating the need to categorize them manually. Customers can also find products based on these attributes, it said.

The checkout page also got an update, Shopify said. The platform streamlined the checkout experience, reducing three pages to just one that customers must interact with. That cut buyer completion time by an average of four seconds, it said. Shopify added 14 new APIs and 90 new apps retailers can use to customize their checkout pages. The new apps allow for features including loyalty programs, post-purchase surveys, order tracking and other customizable content.

Shopify released a new semantic search tool using artificial intelligence (AI), too. The storefront search feature uses AI to surface results consumers are more likely to buy from, rather than exactly the keywords they searched, Shopify said.

Shopify channel updates

Shopify said some of its new updates were designed to make it easy for retailers to expand into new marketplaces and social channels. One such update is point-of-sale ship from store. Retailers will be able to select a store as the fulfillment location for an order through Shopify, so staff can pack and ship the order directly from the location. In-store fulfillment can increase efficiency, reduce warehouse load, and minimize shipping costs, Shopify said.

The platform also released Markets Pro to U.S. customers. The product bundle is designed to make selling internationally easier for U.S. retailers as a hub for help on global taxes, international shipping labels, customs, and more.

New marketing releases

Shopify says Shopify Audiences will “help you find more customers, lower customer acquisition costs (CAC), and improve return on ad spend (ROAS).” The app gives retailers the ability to target consumers on social platforms like Meta, Snapchat and TikTok. Then, Shopify uses machine learning (ML) to improve advertising targeting. This edition of Shopify Audiences includes benchmarks for measuring results against similar retailers and industries, Shopify said.

The platform also announced it will rebrand Shop Cash as Shop Campaigns. The customer acquisition tool will add new estimates and analytics in this update, Shopify said.

Business operations updates

Shopify said it’s using AI on several new releases to simplify retailers’ business operations under the banner “Shopify Magic.” 

Media Editor uses generative AI to create instant product images for free, Shopify said. The editor tool can create professional-looking images and enhance low-resolution files into high-quality media assets, it said.

Sidekick, meanwhile, will be “the world’s most useful AI-enabled assistant for commerce,” Shopify said. “It allows you to use AI to increase productivity, improve workflows, make smarter decisions, and spend less time on operational tasks.” The tool is in an early access rollout with select retailers. Shopify did not share when results will be available, or when other customers will get access to it. It previously demoed Sidekick answering retailer questions, such as “How do I set up a discount for my holiday sale?”

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