Amazon Business expand into the B2B e-commerce space

Marketplaces grow faster than other B2B digital sales channels

Mark Brohan — Tue, 13 Feb 2024 22:03:34 +0000

B2B marketplaces tell the story of where B2B ecommerce finished in 2023 and where it’s headed in 2024.

The moral of the story: B2B marketplaces remain the fastest growing B2B digital sales channel and a key driver in how business organizations of all sizes are undergoing digital transformation, according to the newly published 2024 B2B Market and Customer Experience Report.

Consider these metrics about B2B marketplaces

B2B marketplaces grew year over year nearly 100% in 2023. That’s up to $224.0 billion from $113 billion in 2022.
B2B marketplaces last year accounted for 1.3% of all B2B sales.
There are now 750 vertical industry marketplaces (and counting).
Six in 10 B2B buyers are doing 26% or more of their B2B buying on Amazon Business.
More than half of B2B buyers, or 59%, are conducting more than a quarter of their purchases on online marketplaces, according to a new survey of 103 B2B buyers.
Amazon Business is the dominant marketplace, the industry’s most influential marketplace, and by far the biggest, accounting for about one transaction of every four, Digital Commerce 360 projects.
Marketplace service provider 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.
The rollout of these new marketplaces will continue in 2024, and the total number of B2B marketplaces could exceed 1,000 in as soon as two years, Digital Commerce 360 projects.

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Procurement pros want more digital tools and sustainability

Mark Brohan — Wed, 27 Dec 2023 20:12:37 +0000

Procurement and supply chain directors want more sustainability and visibility into the products and services they buy online and offline from B2B sellers, according to a recent Amazon Business survey of over 3,000 procurement pros.

For example, 94% of companies want to know the place of origin for the products they procure for their organization, and 90% want to know the type of transportation used to ship the products.

“With a clear vision for more responsible purchasing, the question is whether or not organizations are positioned to execute that goal,” the Amazon report says. “Even though six in 10 respondents have mandates for sellers that follow sustainable practices — and many more would like to purchase from these sellers even if not required — 85% of respondents say the difficulty of sourcing suppliers who follow sustainable practices prevents their company from setting or achieving sustainability goals for procurement.”

As B2B companies deal with procurement costs, staffing, and supply chain issues, they focus on digital transformation strategies. More than half of survey respondents said they already use such procurement applications as analytics, automation and electronic invoices, the Amazon Business study found.

At the same time, more than two-thirds of respondents said they face such challenges as retaining and developing procurement staff talent, cutting procurement costs and building resilient supply chains.

“We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success,” says Alexandre Gagnon, vice president of Amazon Business Worldwide.

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European small businesses want more help selling online

Mark Brohan — Fri, 08 Dec 2023 17:46:21 +0000

The number of small businesses in Europe has grown 18% in the past several years, according to new research from Amazon Business. And ecommerce growth is playing a key role.

With business conditions not the best on the continent and more small businesses in Europe facing challenges, more sellers are turning to ecommerce to for help in finding fixes and solutions, says the Amazon survey of 2,500 small business owners.

The surveyed small business owners are in:

France
Germany
Italy
Spain
The United Kingdom

The survey found that 70% of owners of small and medium enterprises (SMEs) in Europe lack confidence in how to scale their businesses online.

Main areas where owners would most benefit from support when scaling their businesses include guidance on how to best utilize a logistics support network (73%) and assistance on value-added tax (VAT) and customs compliance (70%).

For European businesses trying to scale, ecommerce was called out as benefiting business owners. Being online means:

They are always open (45%)
Ecommerce provides an ability for them to sell from anywhere, at any time (44%)
Ecommerce offers access to a wider base of customers (44%)

In fact, small business owners spend an average of 10 hours a week looking into how they can scale up and how to cope with more online sales, according to the Amazon survey.

“Launching or scaling an existing ecommerce business can be a daunting, complex, and time-consuming experience for sellers,” says Amazon Europe vice president of seller services Xavier Flamand.

There are currently 125,000 European sellers on Amazon Business. They’re currently listing more than 1.2 million products, Amazon says.

“65% of sellers say they would benefit from customized support to sell their products online,” Flamand says.

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Amazon Business: Procurement directors want to leverage AI

Mark Brohan — Tue, 28 Nov 2023 19:23:16 +0000

Procurement and supply chain directors want to get a whole lot smarter on how they can use artificial intelligence (AI) to build more efficient and effective systems and business processes, according to a recent Amazon Business survey of over 3,000 procurement pros.

Just under half (45%) of respondents would be willing to incorporate AI immediately into their procurement operation, while 80% indicate they would do so within two years, according to Amazon Business. With AI-powered technology applications, procurement pros can more quickly identify product sources and manage expedited deliveries, says Aster Angagaw, Amazon Business vice president and head of the public, commercial and strategic sector.

Amazon Business and procurement AI

The technology sector (52%), followed by telecommunications (51%) and medical/pharmaceuticals (49%), is leading the charge to adopt AI immediately or within a year. Health care services are the least likely to do so (38%), followed by government respondents (39%).

Procurement professionals also ranked security and technology (22%) and technological changes/AI (11%) as an overall challenge/risk in the next year. Concerns largely arise around data security and whether the technology is ready for real-world applications.

As procurement teams welcome emerging technologies, there’s a growing need to strike the right balance between improvements and security best practices. However, time is also of the essence. Even a year or two delay can open a window to greater advancements in AI, meaning laggards only fall further behind competitors. Just under half (45%) of respondents would be willing to incorporate and adopt emerging procurement solutions.

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Challenged procurement pros want automation and AI

Paul Demery — Wed, 15 Nov 2023 15:00:54 +0000

Following a period of cutting costs and supply chain disruption, procurement teams want more help from digital technology — and sooner rather than later.

Companies across various industries plan to increase procurement technology spending next year to improve their efficiency and agility in managing procurement across their global supply chains, Amazon Business says in its 2024 State of Procurement Report, released this week.

The report, featuring data and analysis from an international survey of over 3,000 procurement professionals, notes that 98% of respondents said they were planning investments over the next few years in analytics and insights tools, automation, and artificial intelligence.

“Following a year of focusing on reducing costs, procurement leaders are now planning to use the funds they saved to invest in approaches to optimize their procurement processes and allow them to operate more strategically, with the efficiency and complexity of procurement listed as the top challenge they’re currently facing,” Amazon says.

Amazon says the report compiled and analyzes insights from 3,108 procurement professionals at organizations involved in government, financial services, hospitality and food service, health care services, manufacturing, medical and pharma, retail, technology, and telecom industries. Survey respondents represented the United States, the U.K., France, Germany, Italy, Spain and Japan.

Aster Angagaw, vice president, head of public, commercial and strategic sector, Amazon Business

Aster Angagaw, Amazon Business vice president and head of the public, commercial and strategic sector, says procurement professionals are zeroing in on several critical areas, including speed in procuring products and agility in dealing with sudden needs to find new products, sources and shipping routes.

She notes that many companies have a procurement processing system set a certain way and following a particular process. When unexpected changes occur, she adds, “your ability to respond quickly and flexibly becomes really challenging.”

But she asserts that with business analytics and other AI-powered technology applications, procurement pros can more quickly identify product sources and manage expedited deliveries.

“This whole idea of smart business buying is being able to use the digital automation, digital transformation, AI and machine learning to create this opportunity for efficiency, flexibility and agility,” Angagaw says.

She adds that AI and other new technology applications can help procurement managers fulfill corporate goals of procuring products from a diverse group of suppliers known for following sustainable, environmentally friendly, and good governance practices.

But the study found that while 81% of respondents said their companies have mandates for purchasing from certified sellers, including, sustainable, local, or minority-owned businesses, 85% said they needed help finding such suppliers.

The study noted the following percentages of respondents using technology applications:

62% – Procurement analytics or reporting tools.
54% – Automation of manual procurement processes.
51% – Digital or online invoices.
47% – AI-driven optimization of purchasing decisions.
41% – Voice technology.

The study also noted the following percentages of respondents identifying their top areas for investment:

36% – Technology or tools to be more efficient.
35% – Mitigating procurement risks amid economic or geopolitical challenges.
33% – Setting or meeting goals for ESG of buying from certain types of suppliers.
30% – Decentralizing purchasing so buyers can purchase more easily for their teams.
29% – Integrating more closely with other parts of an organization.

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

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What were the biggest ecommerce takeaways from Amazon’s Q2 earnings call?

Abbas Haleem — Mon, 07 Aug 2023 21:08:06 +0000

Amazon.com Inc. released its earnings report last week, covering several key facets of its ecommerce business.

President and CEO Andy Jassy told investors on Amazon’s Q2 earnings call that the ecommerce giant has been improving its artificial intelligence and machine learning technology. It has also been making its fulfillment network more efficient. Jassy also said Amazon Business, its B2B division, is one of its fastest growing offerings.

Amazon is 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. The latest analysis of the industry as whole is published within the 2023 Global Online Marketplaces Report.

For more detailed coverage, read our Amazon Q2 earnings story.

1. Amazon has been refining its AI

Jassy last week said AI “is going to be at the heart of what we do.” Moreover, he said every business division within Amazon has multiple ongoing generative AI initiatives.

Among those initiatives, Amazon has built CodeWhisperer, an AI-powered coding companion that recommends code snippets directly in the code editor. This is meant to accelerate developer productivity in the coding process.

But Amazon’s work in the AI sphere is still in an early phase, he said.

“Generative AI has captured people’s imagination, but most people are talking about the application layer, specifically what OpenAI has done with ChatGPT,” Jassy said. “It’s important to remember that we’re in the very early days of the adoption and success of generative AI, and that consumer applications is only one layer of the opportunity.”

2. Faster fulfillment in Amazon’s Q2 and beyond

In its fiscal Q2, Amazon reduced the miles its drivers traveled to deliver packages to customers by 19%, Jassy said. It did so through “regionalization,” or its logistics overhaul that shifts its fulfillment network from a national one to a network divided into eight regions that can each operate on their own.

This has led to a 20% reduction in number of touches for each delivered package, Jassy said.

“When shipments come from fulfillment centers that are closer to customers, they travel shorter distances, which cost less in transportation, gets there faster and is better for the environment,” Jassy said.

He said Amazon’s development and expansion of same-day fulfillment facilities has driven this increase in efficiency. He added that the same-day facilities are Amazon’s fastest fulfillment mechanism and one of its least expensive.

The same-day facilities are located in the largest metro areas around the country, Jassy said. Amazon intends to double the number of these facilities, he said.

“While we’re seeing strong early results from this regionalization effort, we still see several ways in which we can be more efficient in this structure and we believe will improve productivity further,” Jassy said. “We’ve also re-evaluated virtually every part of our fulfillment network this past year and see additional structural changes we can make that provide future upside.”

3. Big business, small business

Jassy emphasized Amazon Business’ $35 billion annual run rate for gross sales. It serves more than 6 million customers.

Still, he said, Amazon has only a fraction of the features it needs “to address more of the enterprise at this point.” For example, there are features to make bigger procurement workloads easier for companies.

Merchants that use Amazon’s “Buy with Prime” feature, on average, increased their shopper conversion 25%. That “makes a real difference to their business,” Jassy said.

He added that those who “participate in Prime Day activities, in aggregate, experienced a 10x increase in daily Buy with Prime orders during the sales event period versus the month before we announced Prime Day.”

Although Jassy and other Amazon representatives did not mention its small business sellers on the Q2 earnings call, Amazon did mention them in its earnings release.

It said more than 60% of Amazon sales in its marketplace came from independent sellers, most of them small and medium-sized businesses.

U.S.-based independent sellers sold more than 4.1 billion products and averaged more than $230,000 in sales, Amazon said. It also announced a filter on its marketplace to search for small businesses.

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Small businesses face pressure to cut procurement costs, study says

Peter Lucas — Tue, 09 May 2023 20:29:27 +0000

Finding ways to reduce purchasing costs and stay within budget over the next 12 months — amid inflation and the threat of a recession — is one of the top priorities for buyers at small and mid-sized businesses, according to a recent survey by Amazon Business.

The survey, which polled 500 small business decision-makers in the United States in March, found that 61% of respondents will look for ways to reduce the costs associated with B2B purchases over the coming year. In addition, 61% of respondents say staying within budget is a priority.

Todd Heimes, director and general manager, Amazon Business Worldwide

“Small and medium-sized business owners say concerns about how inflation and a possible recession will affect their business are keeping them up them at night,” says Todd Heimes, director and general manager, Amazon Business Worldwide.

63% of small business decision-makers polled listed high inflation as the top challenge, while 39% cited a possible recession, and 30% cited supply chain disruptions, the survey found. Respondents could list more than one concern.

88% of respondents said the ability to easily find items is a key factor in growing their businesses long-term, while 91% cited the ability to find items within their price range.

“Even the smallest businesses are looking to find more efficient ways to purchase,” Heimes says.

Procuring products faster to boost growth

In addition, buyers at small businesses are seeking ways to make the purchasing process more efficient, helping them find and purchase what they need faster and more easily to spur their companies’ long-term growth, according to the survey.

The survey asked 500 small-business decision-makers in the U.S. about their online purchasing patterns, the challenges and opportunities impacting purchasing processes, and the broader landscape for small businesses. All respondents were 18 years or older, work in purchasing at a business making $25 million or less in annual revenue. 61% of respondents worked full-time, 7% part-time, and 32% were self-employed.

Amazon Business produced the poll with marketing agency Walker Sands; data collection was conducted via online market research vendor Rep Data between March 20 and 27.

Heimes points to Amazon Business’ use of artificial intelligence and machine learning technology as two ways the marketplace is helping small businesses purchase more efficiently and quickly find products within their price range.

“We are constantly adding greater product selection through Amazon Business Sellers to provide the most relevant selection for small and mid-sized business buyer’s needs,” he says. “We are also increasing the number of products with business-specific pricing and quantity discounts.”

“Subscriptions are another way for small and mid-sized businesses to receive discounts,” Heimes adds.

In addition to providing features through its marketplace that aid small businesses’ operations, Amazon Business is also providing grants to help small businesses grow.

Small-business grants program

This month, Amazon Business is making more than $250,000 in grants available to eligible small businesses that purchase through its marketplace and have less than $1 million in annual revenue.

Amazon Business will select one grand-prize winner and a group of finalists and semifinalists to receive the grants and other perks such as Business Prime memberships and Amazon devices. Applications are due by May 21; winners will be announced July 17.

In 2022, Virtual X Kitchen, a food service business that serves customers exclusively by delivery and pick-up based on phone and online ordering, was a 2022 grant finalist. The College Park, Maryland-based ghost kitchen received $20,000 which it earmarked to create a sustainable restaurant model for urban areas by maximizing kitchen space for multiple owners to share, streamline the ordering process, and raise awareness of its brand.

Peter Lucas is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.

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B2B marketplaces refine their expansion strategies

Paul Demery — Thu, 02 Mar 2023 22:24:34 +0000

At Amazon Business, changes always seem to be in the works. To be sure, the fact that reported annualized sales already have surpassed $25 billion — and that Wall Street analysts estimate it will surge to $80 billion by 2025 — has not slowed Amazon’s development curve.

New developments include expanded free-shipping deals and artificial intelligence and machine learning applications to better match customer demand with available products from suppliers, says Todd Heimes, director and general manager, Amazon Business Worldwide. An inside look at the Amazon Business growth strategy is one of several articles on B2B marketplaces in the just-released Building Better B2B Marketplaces report.

In addition, Amazon Business has increased its sales and account services with large enterprises, including the procurement of direct goods used as components in manufacturing as well as the more common indirect goods like office supplies companies purchase for their internal operations.

The companies that use Amazon Business, meanwhile, are leaning more toward new ways of connecting with the marketplace that include using an application programming interface and avoiding its dot-com interface altogether.

“That’s exciting — and that’s where we’re headed,” says Chris Costello, executive vice president of worldwide strategic accounts.

Among the other marketplaces trends in the report:

Industrial products distributor Bay Fastening Systems’ BaySupply.com has developing purchasing features designed to help its customers work for efficiently, including with new online payment options;
Germany-based apparel marketplace Fashion Cloud is entering the U.S. market with plenty of venture capital;
The trucking industry is driving ahead with marketplaces like Convoy;
Steer Technologies has a marketplace recipe for helping the restaurant industry;

AVIA Marketplace is bringing a fresh face to B2B commerce in healthcare.

The Building Better B2B Marketplaces report is available as a free download.

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Facing the challenge of finding sustainable-certified B2B sellers

Gretchen Salois — Wed, 26 Oct 2022 22:01:28 +0000

Now that online B2B buying is the norm, how can businesses promote sustainability as part of an overall e-procurement strategy?

More than two-thirds, or 69%, of B2B buyers work at organizations that require them to make purchases from sellers that follow sustainable practices, according to the second State of Business Procurement Report from Amazon Business.

The report notes that procurement is becoming a crucial part of meeting corporate social responsibility (CSR) goals. And it asked respondents to name their four top CSR-related procurement priorities. Improving sustainability in purchasing practices was cited by the largest percentage of respondents (63%). This was followed by supporting local businesses (39%), supporting remote work for employees (37%), and increasing diversity among suppliers (34%).

In addition, the report says that 68% of B2B buyers said they plan to make at least 40% or more of their purchases online by the end of this year. That is up from 56% in 2021.

Amazon Business surveyed 440 U.S.-based buyers at midsize organizations (fewer than 250 employees) to large enterprises (10,000 or more employees). All commercial organizations involved in the survey made more than $250 million in revenue in 2021. Surveyed buyers worked in sectors including government and nonprofit, education, healthcare, and commercial industries.

Buyers intend to buy more from certified sellers

E-procurement is nearly a $1 trillion annual ecommerce market, based on a projection from Digital Commerce 360. Promoting sustainable practices now will help establish confidence in buyers that want to practice a conscientious business strategy. And being mindful of one’s impact on the environment is increasingly important. 54% of U.S. online adults are concerned about the impact of climate change on society, according to a Forrester Research report “The New Green Consumer,” published in March 2022.

The Amazon Business report highlights that 43% of buyers have an internal goal to spend a certain amount with certified sellers. But it’s not a requirement. A smaller share of 24% indicated they have a required dollar amount to spend with certified sellers per year. 24% said they will try to spend with certified sellers, but not at the cost of dollars or convenience. And 9% said they don’t take certifications into consideration when purchasing.

Sustainability must be affordable and convenient

69% of B2B buyers said their organization had established sustainability-related goals. These goals require them to purchase from sellers that are certified as carrying out ing sustainability practices, such as net-zero carbon emission production or the use of renewable energy. In addition, the buyers identified convenience and affordability in procurement as also top priorities when pursuing products from sellers following sustainable practices.

But more than half of respondents (55%) said it was challenging to fulfill those goals because it is difficult to source sustainable-certified sellers. And 81% of buyers said that the difficulty in sourcing sustainable suppliers hindered their organization from achieving sustainability goals in e-procurement.

That’s a problem since, according to the report, 91% of B2B buyers prefer online purchasing over traditional offline channels. The impact of buying from sellers enforcing sustainable practices will have long-term effects — as will not taking sustainability into account.

More than half of B2B buyers (52%) said insufficient online information about suppliers’ characteristics is why they can’t find suppliers that fit the goals of their business. And 44% cited having trouble finding new suppliers as part of the reason it is difficult to reach sustainability goals.

But 89% of buyers said they would be more likely to make purchases from sellers they can easily identify as sustainably certified.

The sustainability role of B2B marketplaces

To find certified suppliers, buyers should lean on e-procurement channels. This includes e-procurement software and B2B marketplaces. Buyers can find, compare and purchase products in their price range. And suppliers are certified as sustainable or carbon-neutral, the Amazon Business report says. Such e-procurement systems also let purchasing organizations monitor and adjust their spending throughout the year to meet sustainability as well as other CSR goals.

B2B marketplace Circular.co, for example, supports the buying and selling of sustainable commodities like plastic and other materials. By establishing a website where buyers can purchase from certified recycling suppliers, the Circular marketplace frees buyers from the manual practice of calling up a limited number of trusted suppliers and comparing prices. “Circular.co is not just a point or spot marketplace. It facilitates the entire sourcing, vetting and pricing process,” says Ian Arthurs, the founder and CEO.

Amazon Business provides through its Business Prime program APIs, or application programming interfaces, to integrate its B2B marketplace with a participating company’s procurement and accounting software technology. For example, such integration helps healthcare industry buyers “automate time-consuming tasks, find and order supplies, and evaluate suppliers’ certification status within their existing systems,” Todd Heimes, director and general manager of Amazon Business, said in the report.

Refining procurement technology and processes

Still, challenges remain for companies to upgrade their internal technology systems to get the most out of e-procurement. This includes systems for authorizing purchases and managing digital invoices, the report says. “Business buyers now need to refine their processes, workflows, and digital strategies to take full advantage of e-procurement,” according to the report.

“Organizations should tackle the basics of digital transformation — such as adopting digital/online invoices and automating procurement processes — before tackling advanced technologies like voice or AI,” according to the report. “Laying a strong digital foundation helps procurement departments confidently and effectively tackle advanced capabilities when they’re ready. Being prepared for the needs of tomorrow starts by taking small steps today.”

The report found that a little more than half of companies have plans to upgrade their technology over the next several years to support e-procurement. The report lists the following as the top four procurement technology investments over the next five years. By 2027, the percentage of companies planning these investments include:

Automation of manual procurement processes, such as purchase approvals, 57%
Digital/online invoices, 55%
Voice technology, such as placing orders via a voice-activated technology device, 35%
AI-driven optimization of purchasing decisions. This considers such criteria as a buyer’s related purchasing history, a supplier’s sustainability practices, and spending budgets, 34%.

Amazon Business’ tools to gauge procurement progress

Amazon Business provides B2B sellers with 16 certifications, which include Compact by Design and Pre-Owned Certified and the Climate Friendly Badge. For buyers, the Guided Buying feature allows Amazon Business Prime members to prioritize products and sellers with sustainability certifications, says Aster Angagaw, vice president, head of strategic and public sectors for Amazon Business. Members can filter out products that don’t meet their organization’s policies and goals. In addition, they can designate which items are approved for purchase; their employees can submit purchase requests for items in restricted categories.

Data can also play a critical role in optimizing buying processes and encouraging sustainable purchasing, said Angagaw.

Tools to visualize trends

“The Spend Visibility feature on Amazon Business improves visibility into purchasing trends with out-of-the-box dashboards, allowing teams to track progress toward their ESG goals,” she says.

The Amazon Business Analytics tool provides data that buyers can use to create spending reports, configure visual dashboards, and track progress towards spending goals in real time. Business buyers can create exportable order reports to track spending against sustainability certifications.

Companies can also set up guardrails with digital purchasing to ensure they’re meeting sustainability goals while staying within their spending budget, she says.

The Budget Management tool on Amazon Business gives procurement teams more budgetary transparency and control checkpoints like pre-purchase approvals. “If there is a specific limit on spending in certain categories, buyers on Amazon Business can set those parameters to work within,” Angagaw says. Members can also filter for suppliers with the required sustainability certifications.

“Digital purchasing lets small businesses filter for products that are both budget- and climate-friendly. It ensures they can meet their purchasing goals,” Angagaw says. “This ability to cross reference is a simple but powerful tool. It gives buyers full control over what they purchase and how they impact the environment while doing so.”

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OMG: Another Amazon sale?

Lauren Freedman — Mon, 10 Oct 2022 17:00:04 +0000

When I heard rumors surrounding a potential launch of Amazon’s October sale days, labeled Prime Early Access, I couldn’t help but roll my eyes.

It seemed like Amazon was up to its usual tricks. My gut reaction was “why?” And I wondered if consumers are paying attention or simply annoyed by these ploys. As I was finishing this Perspective article, I received an email about its “epic” details, which was certainly marketing at its finest.

The sentiments about Prime Early Access among coworkers I reached out to were what I expected. These stuck out to me:

“I’m sick of deals. Makes me feel like I should always just wait to purchase because there’s always going to be SOME deal holiday coming soon.”
“What’s the point? The timing doesn’t make sense to me.”
“Maybe I’d buy something if it’s a real good deal but I’m spending a lot more on groceries these days.”
“Really??? Didn’t we JUST do this?!?”

I can be hasty in my thoughts on Prime Early Access, so I took some time to think about the rationale for this action and then decided to counter it with how I saw the reality. As always, I recommend letting the dollars and spending tell the story. It’s important to remember that it can’t be just based on Prime Days 1.0 and now 2.0 but rather Holiday 2022 and full-year results. Retailers are infamous for inventing holidays and slicing the year’s sales numbers to tout their message, so sellers beware.

The rationale: It was a publicity stunt

Like every company, Amazon looks to accentuate the positive. Amid warehouse worker issues and flat revenues, a little bit of good news could go a long way. My overall reaction is that this is a way to try to hedge a potential tough holiday sales season. And as one of my more seasoned coworkers suggested, “the new CEO is trying to boost sales and profits in Amazon’s unprofitable retail operation. Bad news for other retailers.”

An early gauge on the season ahead

My second thought was it would give Amazon a gauge on a season that may be difficult to predict. Digital Commerce 360’s survey of 70 retailers in September revealed that 64% planned to start their holiday marketing by October. Ironically, 13% had already begun those efforts during Amazon Prime Day, so they are not alone in their approach. And if it’s about the early access they tout, 39% of retailers indicated they had plans for early season sales.

Managing inventory is wise in today’s economic climate

Perhaps Amazon and/or some of their marketplace sellers find themselves in a tough inventory position. This would be a chance to rid themselves of excess inventory while also putting some muster behind some of the classic holiday hits in toys, consumer electronics and their own private-label products. Our research reported, however, that 49% of the retailers surveyed believed they were in a good inventory position, so I believe retailers have heeded the warnings.

Amazon rewarding membership requires finessing

Remember the slogan, membership has its privileges. There have always been privileges associated with membership, but it seems to me from the research on Amazon Prime that it’s all about the free shipping.

Our Digital Commerce 360 Amazon survey of 1,000 online shoppers in September 2022 kicked off with a question about if the shoppers had a made a purchase on Amazon. It inquired about their membership status. Findings revealed that 68% made purchases as Amazon Prime members, while 27% purchased without membership, and just 5% didn’t make a purchase on Amazon at all.

To explore their sentiments about Amazon, we asked about their agreement with 17 statements. The No. 2 answer cited was their Prime membership and its associated free shipping among 45%. Let’s face it, Amazon is an invaluable resource to many, top-of-mind to most and their reliability is hard to beat but free shipping seals the deal.

The big spend — or not

Shoppers intend to spend about the same for the holidays this year compared with last year, our survey data shows. So, perhaps Amazon believes if it gets more buyers to the table early, it can take a greater share of that wallet.

To ground my own biases, I thought it would be insightful to share a few of the findings from a Digital Commerce 360 and Bizrate Insights survey of 1,088 online shoppers in September. The reality is shoppers only have so much money to spend.

Trying to capture the greatest share of spending will be tricky this season due to shopper sentiment. When it comes to their spending, 64% said they intend to spend about the same or less on their holiday spending.

When we asked about year-over-year holiday spending specifically about Amazon, as part of our Amazon survey, the numbers are almost in sync but less positive. 73% said they will spend about the same or less.

Inflation intervenes

Remember the phrase, “It’s the economy, stupid” James Carville coined in 1992. Thirty years later, in 2022, inflation is likely part of what’s fueling some of this activity.

Our question on the impact of current economic conditions reinforces some of the likely behavior going into the holiday season that forecasts headwinds when it comes to spending.

40% said they will comparison shop more as they expect prices to remain high. Inflation will cause them to purchase less overall (35%), and 30% will make fewer purchases overall given their current financial situation. Lastly, 25% expect to find more promotions than in past holiday seasons.

How much “early buying” do shoppers desire?

Retailer perception suggests that half of consumers will take advantage of early access in the season to avoid out of stocks. That may be true, but not sure they will buy more overall. But like the retailers, I’m more concerned about the 63% who believe high inflation will cause consumers to purchase less.

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