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Headquarters
410 Terry Ave. N., Seattle, 98109-5210, Washington, United States -
Annual Global Sales
$513,983,000,000
Total U.S. Sales
$352.8 billion in North American sales in fiscal 2023 (ended Dec. 31, 2023)
Total U.S. Stores
68 total physical locations in the U.S., spanning 45 Amazon Fresh grocery stores and 23 Amazon Go stores
Shopper Count
More than 200 million Prime members globally (an estimated 150 million in the U.S.)
Key Facts
- Ranked second overall in Dunnhumby's 2023 Retail Preference Index (RPI) study (Amazon ranked first in the digital category)
- Ranked second for the second year in a row in the Brand Finance Global 500 2022 Index, with brand value growing 38% to $350.3 billion
- Dropped to third in the list of the world's most valuable brands, according to the 2022 BrandZ Top 100 Most Valuable Global Brands ranking compiled by Kantar and WPP
- Ranked second in Fortune magazine's “Fortune 500” list in 2022 (maintaining its spot from the prior year)
- Ranked second in Interbrand's 2021 Best Global Brands report
- Ranked 10th in the 2021 AxiosHarris Poll on corporate reputation
- Ranked second, behind Apple, in Fortune's survey of most beloved brands since 2017
- Acquired Whole Foods Market in 2017
- Prime members account for roughly 65% of shoppers
- Amazon closed all its Books, 4 Star and Pop Up locations in 2022
- More than 60% of sales are from independent sellers, according to the retailer's 2022 U.S. Small Business Empowerment Report (see Resources, below)
- In 2022, U.S.-based sellers sold more than 4.1 billion items worldwide
- In the first three months of 2024, delivered more than 2 billion items same or next day to Prime members worldwide
- In 2023, more than 1 billion customers in the U.S. and India watched Amazon Live streams across desktop, mobile and Fire TV
Key Executives
- President and CEO: Andrew Jassy
- CEO, Amazon Web Services: Adam Selipsky (stepping down in June 2024)
- CEO, Amazon Web Services: Matt Garman (effective June 2024)
- CEO, Worldwide Amazon Stores: Doug Herrington
- SVP, CFO: Brian Oslavsky
- SVP and CFO, Amazon Web Services: John Felton
- VP, Worldwide Controller, Principal Accounting Officer: Shelley Reynolds
- SVP, General Counsel, Secretary: David Zapolsky
- Market Position and Strategy Overview
- Must-Know Terms
- Promotional Strategy
- Merchandising
- Collaborative Alliances
- Displays and Signage
- In-Store Media
- Store Formats/Growth
- Special Departments/Services
- Customer Segments
- Internet Marketing
- Retail Media
- Mobile Marketing
- Social Media
- E-Commerce
- Circulars & Publications
- Loyalty Programs
- Private Label
- Cause/Community Programs
- Advertising Strategy
- Solution Providers
- Sponsorships
- Marketing Expenditures
- Metaverse
Market Position and Strategy Overview
Market Position and Strategy Overview
A nearly 30-year-old company, Amazon has evolved from a dotcom startup selling books to an e-commerce juggernaut supplying a constantly expanding array of merchandise and services. Today, the company is synonymous with online shopping and is the undisputed leader in the space, even as growing competition and rising FBA costs are increasingly driving sellers to expand to other marketplaces.
With a new chief executive officer taking the helm in 2021 and ending the Jeff Bezos era, Amazon entered a new phase. The e-commerce giant’s free speedy delivery for its Prime members may originally have been a perk for shoppers, but has become a competitive imperative for Amazon as it evolves its store formats, such as closing its retail stores and underperforming Amazon Fresh (or putting the process on hold) and Amazon Go formats. (See Store Formats.) While Amazon has vast resources and a propensity for innovation, the retail giant remains in a learning phase in both grocery and physical retail, even after nearly seven years of acquiring Whole Foods Market. It continues to raise the bar for shoppers’ expectations around assortment, pricing, home deliveries and e-commerce.
Amazon’s rise in the U.S. reached a tipping point in 2021 with Amazon dethroning Walmart in retail dollars. Amazon and Walmart have been in a tight race for domination, however. Tracking 2021 spending, Pymnts reports Amazon got 9.4% of all U.S. retail dollars, compared to 2.2% in 2014. Amazon’s retail sales are strongest in electronics, appliances, sporting goods, hobbies, music and book spending, garnering about five times as much as Walmart. For example, Amazon captures nearly a quarter of all U.S. spending in the electronics and appliances category, compared to 5.1% for Walmart. Amazon also lands more than double the customer apparel spend of Walmart. Amazon trails Walmart in grocery sales.
Amazon was projected to overtake Walmart to become the largest retailer in the U.S. by 2024, and add more than $294 billion in U.S. sales between 2021 and 2026, according to an annual report by Edge by Ascential. By 2026, Amazon is expected to hold almost 15% of U.S. retail market share. Walmart’s share will shrink to 12.7%, from 13.2% in 2021. It's unclear if that will happen, however. For 2023, Walmart landed at the top of the National Retail Federation's list of global retailers, with $585.2 billion in annual revenue. Amazon was second on the list, with $353.7 billion.
Amazon's innovation and business savvy is legendary. Founder Jeff Bezos famously refers to every day as "Day 1" as a reminder to maintain start-up thinking even as the company grows to ever more massive size and scope. Andy Jassy, current CEO, reiterated what Bezos always emphasized: that it remains “Day 1” at the e-commerce giant as it continues to push innovation while coming out of a pandemic into economic and global uncertainties. It continues to speed the fulfillment process by regionalizing its U.S. operations network, using machine learning (including its Supply Chain Optimization Technology, or SCOT) to predict what products customers will want (and where), and building its same-day delivery capability.
The secret sauce to the company's enduring vitality is an obsessively customer-centric approach and desire to delight that drives it to invent on their behalf.
Amazon combines its relentless dedication to a customized customer experience with an on-trend assortment, value and lightning-fast fulfillment, as well as a willingness to take big gambles, and develop and implement disruptive technology. Experiments and even failures are a normal part of the process.
The company is light years ahead of traditional retailers in terms of machine learning and artificial intelligence capabilities that help it anticipate demand and power its merchandising and supply-chain solutions — and it is leading the rapidly materializing voice shopping market with its Alexa voice assistant, having introduced in-skill purchasing in 2018.
It's also using generative AI in its Project P.I. initiative to scan products before they ship. If a defect is found, Amazon investigates further to see if the issue is with the item or if it's a wider problem. Amazon associates then review the flagged items to decide whether they can be resold at a discount on its Second Chance site, donated, or be put to some other use.
The company's diverse portfolio spans industries from industrial manufacturing to media production to healthcare. Through its Amazon Web Services arm, the company also provides global computing, storage, database, blockchain and related services to developers, startups, government agencies, academic institutions and other enterprises.
Must-Know Terms
Must-Know Terms
- Amazon Prime: Amazon’s loyalty program gives members access to streaming video, music, e-books, free shipping and a variety of other Amazon-specific services and deals.
- Amazon Advertising Platform: Amazon had rebranded all of its in-house media services under the sole name "Amazon Advertising" in 2018, phasing out the names Amazon Media Group (AMG), Amazon Marketing Services (AMS), and Amazon Advertising Platform (AAP).
- Prime Day: The annual two-day deals event, Amazon’s largest sale of the year, is regularly held in the summer months for Prime members only.
- Alexa: Amazon's voice assistant technology boasts more than 50,000 skills in the U.S.
- Echo: A voice-activated smart home device powered by Alexa that spans multiple device iterations with special features, from the fashion-focused Echo Look to the screen-enabled Echo Show.
- Dash Buttons: Virtual order shortcuts that are available for tens of millions of products that ship with Prime.
- Amazon's Choice: A product designation introduced in 2015 for both traditional search and Echo.
- Amazon One: Biometric palm print scanners enabling payment for goods in some stores by waving a palm print over the scanner.
- Buy with Prime: Prime members are able to purchase products from other retailers that pay Amazon fees to offer Prime-like services such as free two-day and next-day delivery.
- Amazon Business: The retailer's business-to-business procurement store.
- Business Prime Duo: An Amazon Business membership geared toward small-business owners. It offers business-buying tools, access to business-only pricing on select items, and quick, free business delivery. It also lets small business owners keep their personal and business expenses separate. The benefit is free to Prime members who also buy from Amazon Business.
- Store Analytics: New service offering brands data-driven insights about the performance of their products, promotions and ad campaigns in Amazon Go and Amazon Fresh.
- Amazon Shipping: A ground shipping service for Amazon selling partners that offers delivery on orders placed on Amazon.com, the sellers' own website and other channels. Users of the service purchase labels and schedule a pickup from their warehouse. They can track the progress from pickup to delivery, which typically takes two to five business days.
Thought Starters
- Introduce a product portfolio with optimal materials and package sizes for online sales: Amazon encourages "frustration free" eco-friendly packaging and wants to keep shipping weights down.
- Online shoppers seek specialty SKUs, so take advantage of Amazon's endless shelf.
- Produce custom brand/product content that optimizes images/videos while taking into account Amazon's specific search methods and rules/restrictions for ratings and reviews.
- Improve ranking and visibility by providing thorough, up-to-date product data, including descriptions, images, SEO keywords and enhanced content, such as recipes and video demos.
- Develop the right promotional plan: Understand the roles of Amazon Media Group and Amazon Marketing Services versus brand/category objectives.
- Track the right KPIs: Expand focus beyond sales/unit volume and plan to track/measure online visibility, and adapt ROI metrics from specific categories and different Amazon platforms while accounting for Amazon driving online and offline sales.
- Get the right support: Teams must have specific data and technology expertise.
- With Amazon poised to become a major player in the grocery sector, CPG companies especially should increase resources for the account to ensure that they maximize assortment and achieve full distribution under Pantry and Fresh.
Promotional Strategy
Promotional Strategy
Amazon operates under an everyday low price strategy, offering the lowest possible product costs and enticing shipping offers. As such, the retailer tends to eschew sales events with the exception of holiday promotions and Prime Day.
The company's promotional strategies are mostly aimed at driving Prime membership. Prime Day, for example, is an annual sale during which Amazon slashes prices on a wide, sometimes comical, assortment of items for Prime members. Since its inception in 2015, Prime day had steadily expanded — broadening the concept of a "day," reaching more countries, driving membership and growing sales year over year — until its steady trajectory was interrupted by the effects of the COVID-19 pandemic (and even canceled in 2021 in Canada).
Amazon's 2023 Prime Day event was its biggest ever, selling more than 375 million items worldwide. Data from market intelligence platform Numerator shows that in the U.S., the average Prime Day 2023 order size was $54.05, up from 2022's average spend of $52.26. Average household spend totals were boosted to $155.67, up from 2022's $144.56, per Numerator, which cited 65% of households placing two or more orders, and 18% placing five or more Prime Day orders.
Nevertheless, Prime Day remains one of the biggest shopping events on the retailer calendar and continues to have a halo effect. According to Adobe Digital Economy Index data, total U.S. online spend across all retailers surpassed $11.9 billion during the 48 hours of Amazon's 2022 Prime Day (July 12-13), representing 8% growth compared to $11 billion in total Prime Day 2021 online revenue.
For 2022, Amazon for the first time hosted a second Prime Day event, the Prime Early Access Sale in mid-October, serving as a kick-off to holiday shopping.
For 2023, it announced another October savings event: Prime Big Deal Days. Like the July event, Prime members could sign up for invite-only deals and set up personalized deal alerts. Participating brands include Dyson, Sony, Barbie, SharkNinja, Betty Buzz by Blake Lively and many others. According to Numerator, the average spend per order was $53.47, down from July's Prime Day numbers, but up slightly from 2022's October event. More than half (55%) of households shopping Prime Big Deal days placed two or more orders. The average household spend was approximately $124.
New for 2024, Amazon is holding a six-day Big Spring Sale from March 20-26. U.S. customers get savings of up to 50% on select beauty products and outdoor and sports equipment, and discounts of up to 40% on select home products, spring apparel and electronics. New sales are being announced daily. A Prime membership is not necessary, but Prime customers get access to special deals.
Additionally, Amazon offers:
- Deal of the Day: A single product or a few closely related products swapped out every day.
- Lighting Deals: Short deals limited to one per shopper.
- Limited-Time Sales: Length of deals varies on products ranging from a Fire TV to a magazine subscription.
Recognizing the growing pet care market, Amazon celebrates National Pet Month every May with deals that span several categories. In 2022, the retailer held its first Amazon Pet Day, and grew the event to 48 hours the following year, with celebrity livestream events and savings on thousands of SKUs. The two-day event returns for 2024.
Merchandising
Merchandising
Amazon sells a tremendous range of merchandise purchased for resale from vendors and those offered by third-party sellers, as well as its own manufactured electronics. Product lines include entertainment media, apparel, baby products, consumer electronics, beauty products, gourmet food, groceries, health and personal-care items, industrial and scientific supplies, kitchen items, jewelry and watches, lawn and garden items, musical instruments, sporting goods, tools, automotive items, and toys and games.
Amazon hosts the largest marketplace of its kind, and third-party sellers account for half of Amazon's assortment and as much as a fifth of its U.S. revenue. Scapehero estimates the retailer carries 372 million products in total. The company also offers a variety of web and media services.
Amazon started with books and now is the dominant book retailer — accounting for nearly half of all print and e-book sales in the U.S. — while continuing to expand into nearly every corner of the publishing industry. Its introduction of the Kindle in 2007 drove the e-book and self-publishing boom (through Kindle Direct Publishing). The company also bought audiobook producer and retailer Audible and book review sharing site Goodreads, and started a publishing company: Amazon Publishing. Amazon additionally offers programs that allow authors, musicians, filmmakers, application developers and others to publish and sell content. It even owns a distribution platform for comics in digital format.
The company also boasts particularly strong results in CPG categories, including food, household and health and beauty, as well as in electronics and apparel. Among notable categories:
- Electronics: Amazon leads the pack for where consumers purchase smart home products, though it gets second place behind Best Buy for where they purchase WiFi-enabled appliances.
- Apparel: The company is the biggest seller of clothes online in the U.S., and is second only to Walmart in terms of overall apparel market share. In the past 12 months, 70% of U.S. consumers have bought apparel on Amazon, and 66% of U.S. shoppers expect to buy apparel on the retailer in the next 12 months, reported Coresight Research in mid-2022. Footwear and casual clothing remain the most popular categories, although shoppers are expanding their purchases into others, most notably formal wear.
- Beauty: Amazon draws a large beauty audience with a wide-ranging online store that includes luxury, skincare and fragrance products.
- Pet: The company is a top destination for pet products, excluding food.
- Home Furnishings: The retailer has an estimated 17% market share in the broader home furnishings category and is pushing further into both furniture and appliances, expanding its selection of products, adding custom-furniture design services, and speeding up delivery. Amazon is both the largest retailer in terms of home furnishing gross merchandise value (GMV) and the only retailer that continues to grow GMV in the category, YipitData reports. Amazon’s home furnishing performance varies across subcategories. Bedroom furnishing continues to dominate as Amazon’s largest home category followed by living room and home office furniture.
- Office Supplies: The Amazon Business store for office supplies logged more than 1 million business customers in the two years following its launch in 2015.
- Automobiles: Beginning in 2024, auto dealers will be able to sell vehicles in Amazon's U.S. store. Hyundai Motor Co., through a strategic partnership, will be the first brand on the virtual lot. AWS also will serve as Hyundai's cloud provider, and beginning in 2025, Hyundai vehicles will have more responsive and interactive features via Alexa Built-in.
Amazon Fresh
Amazon Fresh stores offer about 40% of a conventional grocer’s assortment, catering to quick shopping trips. How the store is merchandised and the technologies in the store (See Store Services.) all cater toward a lower basket size.
All Amazon Fresh stores also boast low prices on products like Amazon-exclusive brands, including newly launched Fresh plant-based products and new Amazon exclusive brands like Aplenty and Cursive. (See Private Label.)
Amazon Fresh has a wide assortment of national brands and high-quality produce, meat and seafood, as well as a range of prepared foods made fresh in-store every day — from fresh-baked bread and made-to-order pizzas, to rotisserie chickens and hot sandwiches. Stores offer 365 by Whole Foods Market organics; local brands; regional favorites; and cage-free eggs. Stores also offer self-serve hot and cold bars and in-store dining areas.
Amazon Go
The cashierless convenience store format offers an array of grab-and-go food and beverages, including local and regional favorites, with larger formats, including a wider selection of beer and wine and daily staples. Some stores boast a made-to-order kitchen, which offers about 30 fresh-made breakfast and lunch items available all day. Options include breakfast bowls and sandwiches, burritos, hot and cold deli sandwiches, salads and wraps. Specialty beverage offerings at limited locations include Starbucks fresh-brewed coffee and espresso plus on-tap beverages, such as RISE Nitro cold brew coffee, Health-Ade kombucha and ICEE Slushies, as well as self-serve Pinkberry Fro-yo with a variety of toppings.
Collaborative Alliances
Collaborative Alliances
Amazon is channel agnostic and teams up with many partners. The company has invested in automation and self-service systems that suppliers can use to refresh content, plan and execute promotions, analyze sales and more.
In 2019 the retailer launched the Amazon Manufacturer Accelerator Program to work with manufacturers of national brands to create line extensions or exclusive labels to sell on its site. Merisant, the maker of Equal, for example, released the label “Sugarly Sweet by Equal,” which includes three SKUs.
Retailers and manufacturers also join forces with Amazon to protect their product line. When they work with the company directly, they can point out counterfeit goods and have them removed. For example, Nike forged a relationship with Amazon to begin selling shoes directly through a brand-registry program designed to keep counterfeit goods off the site. Some 22,000 branded products are in the program so far, including SKUs from Johnson & Johnson, Clorox Co., Procter & Gamble, Toms and Patagonia.
In 2017, Amazon had met with CPG manufacturers to convince them to design products that easily and quickly ship directly to consumers rather than creating with the intent of standing out on the shelf. Some manufacturers have indeed redesigned their packaging, and some partners build unique assortments specifically for Amazon's marketplace. For supply chain efficiency, Amazon does require that vendors comply with detailed instructions pertaining to pallet shipments, product labeling, etc.
Amazon also continually introduces new tools for third-party sellers. In 2022, the retailer launched Product Opportunity Explorer to provide anonymized data on trends within product subcategories, tracking metrics like search term volume, sales history and pricing trends. That same year, the retailer launched its Amazon Seller Wallet, which affords third-party sellers more control over holding, viewing, and transferring their funds. The tool, accessible through the Seller Central internal dashboard, is available to a set number of sellers as Amazon collects feedback and refines it.
Amazon also partners with brick-and-mortar retailers. Best Buy has installed shops for Alexa (and Google Home) in 700 locations. Department store chain Kohl's rolled out a 1,000-square-foot "smart home experience" stocking Amazon devices, accessories and smart home products, and is scaling its acceptance of Amazon returns nationwide. Sears sells Kenmore and Alexa-enabled appliances as well as its DieHard range of tires and other auto products on Amazon.com, and allows its auto centers to install car tires purchased on Amazon. Also, after Amazon's purchase of Whole Foods, Amazon's Echo devices popped up in the grocery stores.
In 2018, Amazon also began showing prospective homeowners how its Alexa device and other solutions can fit into their everyday lives by opening "Amazon Experience Centers" in Lennar model homes in Atlanta, Dallas, Los Angeles, Miami, Orlando, San Francisco, Seattle and Washington D.C. Plus, the company teamed with Coinstar to allow the exchange of money for Amazon Cash, which lets people pay for products on Amazon.com without the need for a credit/debit card or bank account, and without any fees.
Among individual brand partnerships:
- In 2023, Amazon and Martha Stewart launched The World of Martha, with kitchen and dining, bedding and bath, furniture and home decor, garden and outdoor, fashion, holiday and more SKUs.
- For Mariah Carey's 2023 Merry Christmas for One and For All! Tour and her 2024 Las Vegas residency, Amazon Music is the exclusive merchandise provider, with T-shirts, hoodies, hats, totes and more, available at the Mariah Carey Amazon store and at the venue.
- Amazon Music sold exclusive merchandise for Beyonce's Renaissance World Tour, with several product releases (Drop 1.0, Drop 2.0, Drop 3.0 and Drop 4.0) including T-shirts, sticker packs, hoodies, hats, tote bags and more, which could be found at the singer's official Amazon Store as well as the Amazon Music Merch Shop.
- For Doja Cat's 2023 arena tour, Amazon Music offered exclusive items on the singer's Amazon store page and in its music artist merch shop, and set up Doja Cat merchandise booths at every tour venue.
- In 2021, CoverGirl deepened its relationship with Amazon by partnering on its Amazon Live shopping events. The brand sponsored two live, hour-long, behind-the-scenes episodes of “Making the Cut,” Amazon Prime’s version of “Project Runway,” which features Heidi Klum and Tim Gunn.
Displays and Signage
Displays and Signage
The company is taking an experimental, data-driven approach to physical retail as it gingerly enters the space, also severy limiting temporary displays and brand signage.
Amazon also supports its various electronic devices with a wide variety of often interactive displays at retailers such as Best Buy, Staples and Target.
In-Store Media
In-Store Media
In an effort to promote its Just Walk Out technology, Amazon plans to start selling ad placements using digital signage in its physical stores in the second quarter of 2022. The company believes it can offer brands insight into ad play count, estimated impressions, impressions by location, along with ASIN sales data, which helps track the success of a specific product.
Digital-out-of-home ads also are included on smart shopping carts, checkout booths and digital smokescreens on refrigerator doors.
Store Formats/Growth
Store Formats/Growth
Amazon took a dramatic turn with its physical footprint strategy in 2022, moving to shut down entirely its Amazon Books, Amazon 4-Star and Amazon Pop Up formats (66 locations in the U.S.). With brick-and-mortar sales lagging behind the company’s overall retail business, Amazon in 2023 also paused growth plans for its Amazon Fresh and Amazon Go banners as it seeks to refine its brick-and-mortar strategy.
While Amazon is ending some of its longest-running retail experiments, the retailer remains committed to building long-term physical retail concepts and technologies as evidenced by its sharpening focus on grocery stores and continuing expansion of the availability of its frictionless technology. (See below.)
![Amazon Fresh](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2022-07/pxl_20220610_201000355.jpg)
Amazon Fresh
Amazon has slowed plans to open new Amazon Fresh stores for the time being — after opening more than a dozen in 2022 — and is likely to close some underperforming locations as it experiments with some of its existing 40-plus stores to find a format that fosters growth. Part of that experimentation includes two refreshed sites in Schaumburg and Oak Lawn, Illinois, which the retailer unveiled in August 2023 as well as a few California locations (see below). Other Amazon Fresh stores are in Washington state (including one designed to be zero net carbon), Virginia, Maryland, Pennsylvania, New York, New Jersey (including a second Garden State location, opened in 2024) and Washington, D.C.
The retailer has pulled out of plans to open some stores, notably in Minnesota and Michigan, and is subleasing some properties.
This brick-and-mortar format is the closest the company has come to delivering a conventional grocery-store experience for shoppers. Measuring around 25,000 to 45,000 square feet — average for a supermarket — Amazon Fresh stores have garnered much media attention for their integration of smart shopping carts, Alexa assistance and e-commerce services. Substantial value on stock-up trips for grocery shoppers is central to the format’s launch strategy, though after a few months, stores tend to fall back to a limited range of strong price-driven deals. Amazon Fresh stores are designed from the ground up to offer a seamless shopping experience, with extra features for members of the Amazon Prime loyalty program. (See Loyalty Programs.)
Many locations are replacing Amazon’s Just Walk Out technology (see below) with its Dash Cart, a shopping cart that helps customers find nearby products and deals, automatically logs products placed inside and processes payment as shoppers leave the store. Amazon has been updating them to be weatherproof and larger like a traditional shopping cart, as well as introducing them at some Whole Foods locations. Several new stores also offer Amazon One, where shoppers scan their palm to begin their shopping.
The two Illinois stores were revamped as part of Amazon's quest to offer enhanced selection, checkout formats, price points and assortment. Three more stores — in Pasadena, Irvine, and Woodland Hills, California — have since been updated. Besides new digital signage and wider center aisles, other changes include:
- More than 1,600 new national and private label SKUs, with the largest increases being in the dairy, snacks, home care, health and baking product categories;
- A wider assortment of international flavors;
- More prepared foods and heat-and-eat options;
- Krispy Kreme Doughnut shops, with pastries and coffee drink options;
- The latest version of the Dash Cart and more self-checkout options;
- Family-friendly events and kid-friendly shopping carts, and a "Fruit Freebies for Kids" kiosk;
- A self-return kiosk; and
- A larger pet section.
To slash the costs of returns made on online purchases, shoppers who bring returns to the store receive a $10 credit toward in-store purchases.
![Amazon Go Seattle](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2022-07/1_20_18amazongoseattle01_1.jpg)
Amazon Go
Amazon has slowed Amazon Go growth plans, and shuttered some existing locations as it rethinks its physical footprint. It has, however, also been opening a handful of stores, typically in suburban locations.
The cashier-less market powered by what Amazon calls Just Walk Out technology is positioned like a convenience store. Shoppers click on the Amazon Go app as they enter the stores and hold their smartphone to a scanner. Every time they pick up an item, it is automatically added to a virtual cart and the total is automatically billed to their Amazon account.
The process employs patented technology including RFID that detects when a shopper takes an item off a shelf, logging multiple items as a shopper goes though the stores, adding up the items and charging the shopper's Amazon account upon exiting through a "transition area." Past purchase history helps identify an item when it is picked up, while sensor fusion brings together data from different sensors to increase accuracy. In addition to image analysis, the weight of the item may be used in determining its identity.
The first 1,800-square-foot Amazon Go opened in 2018. The second Seattle location opened about a mile away from the original store with a smaller footprint at 1,450 square feet, losing the liquor aisle and grocery staples like bread and milk. The third store in Seattle opened with a bigger 2,100-square-foot footprint. The footprint also has expanded to 25 locations, including in Chicago, San Francisco, New York and Southern California, along with two jointly operated Starbucks Pickup with Amazon Go locations in Manhattan. (See below.) Locations typically are in high-traffic spaces in urban markets.
In 2022, Amazon opened its first larger-format Amazon Go, a 6,150-square-foot location in suburban Mill Creek, Washington. Amazon Go stores range from 450- to 2,700-square-feet in the front end, while the larger format store has about 3,250-square-feet of front-of-store selling space. The larger-format store offers Amazon.com Packageless Returns and features two Volta electric vehicle charging stations. Amazon has also opened a new-concept Go store in metropolitan Los Angeles.
![Amazon Style](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2022-07/amazonstyle_menslookbookhero_spring22_051322.jpg)
Amazon Style
Amazon opened its first apparel store, called Amazon Style, with a location in the Los Angeles suburb of Glendale, California, and a second location in Easton Town Center in Columbus, Ohio, in 2022.
Less than two years after launching those stores, it announced its intention to shutter both in November 2023.
![Starbucks Amazon Go](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2022-07/starbucks-pickup-with-amazon-go-004.gif)
Starbucks Pickup and Amazon Go
In 2021, Starbucks and Amazon Go partnered to develop a new store in New York City that combines the order-ahead feature in the Starbucks app and Amazon’s Just Walk Out technology. The store aims to create an easy checkout experience, along with a modernized lounge that features individual workspaces and expanded tables with power outlets and USB ports.
The store offers the full Starbucks menu and an assortment of food and beverages in the Amazon Go market, including fresh-prepared salads, sandwiches, bakery items and snack options that are available for breakfast, lunch and dinner. The Amazon Go market also includes items from local kitchens and bakeries. Starbucks and Amazon Go opened a second New York City location in 2022.
Just Walk Out
In 2020, Amazon began selling its technology platform to other retailers to offer a cashierless shopping experience. The platform combines computer vision, sensor fusion and machine-learning algorithms. Unlike the Just Walk Out experience at Amazon Go and Amazon Fresh locations, where customers identify themselves by scanning an app, the licensed version has customers announce themselves with a credit card. Shoppers insert a credit card into a gated turnstile marked with a “Just Walk Out technology by Amazon” logo. The rest of the shopping experience will be the same as an Amazon location.
In 2022, Amazon introduced Just Walk Out and Amazon One palm-scanning technology to its first Whole Foods Market stores. It plans to have all 500-plus Whole Foods locations in the U.S. outfitted with the Amazon One technology by the end of 2023. Amazon has since introduced an Amazon One palm recognition app, which streamlines the sign-up process. (See Mobile Marketing.)
Amazon began replacing some of its stores' Just Walk Out technology with Dash Carts (see above), but Just Walk Out is being used at third-party locations including
- Restaurants:
- Amazon has introduced the Amazon One capability at select Panera restaurants.
- Major League Baseball Stadiums:
- In 2022, Amazon collaborated with the Major League Baseball's Houston Astros to bring Just Walk Out technology to two food and beverage stores, the 19th Hole and Market, at Minute Maid Park. The Astros’ stadium is the first in MLB to use Just Walk Out. Each store provides staff to offer in-store assistance and for shoppers to show ID for alcohol purchases. Both stores offer a selection of snacks, soda, candy and ready-to-drink alcohol beverages, and the 19th Hole also offers pre-packaged salads, wine bottles and souvenirs.
- In 2023, Amazon added an age-verification feature to its Amazon One system, to allow users to purchase alcohol with a swipe of their hand. People must first upload a govermnent-issued ID on the Amazon One website, and bartenders can then verify they are of age and match the user profile. The feature is being piloted at Coors Field in Denver, Colorado.
- T-Mobile Park in Seattle, home of MLB's Seattle Mariners, and hospitality partner Sodexo LIve! have a food and beverage store with Just Walk Out and Amazon One palm-scanning ID technology. Both frictionless retail technologies are offered at T-Mobile Park’s new Walk-Off Market.
- The National Football League's Seattle Seahawks and Lumen Field is growing the stadium's use of Just Walk Out and Amazon One technology in its retail and concessions locations as well as its new Seahawks Pro Shop Outlet.
- Airports: Several airport retailers offer licensed Just Walk Out technology at select stores.
- Airport convenience store chain Cibo Express Gourmet Markets began rolling out the solution in 2020.
- Just Walk Out technology is now available at WH Smith in LaGuardia Airport in New York City.
- Hudson, a Dufry company, rolled out the Amazon One biometric payment solution and Just Walk Out shopping at its Hudson Nonstop “grab and go” concept, which exclusively offers food and beverage products, at Nashville International Airport and Dallas Love Field. Just Walk Out technology also is available at a newly renovated Hudson Nonstop at Chicago Midway.
- Arenas:
- In 2021, Climate Pledge Arena in Seattle uses Just Walk Out technology with Amazon One palm-based payment for in-arena shopping.
- UBS Arena in Long Island, New York, where the National Hockey Leagues’ New York Islanders play, offers Walk Out Technology in a store.
- In 2022, Texas A&M Athletics; hospitality partner Levy; and Levy’s design studio, DBK Studio, jointly equipped three food and beverage stores at the university’s football stadium, Kyle Field, with licensed Just Walk Out and Amazon One palm-based payment.
- Convenience Stores:
- QuikTrip Corp. added the technology to one of its non-gasoline convenience stores in downtown Tulsa, Oklahoma.
- Energy Mart has introduced the Amazon One technology to seven of its North Carolina c-stores.
- Enerbase Cooperative Resources has piloted the technology at three North Dakota stores.
- College Campuses:
- Marymount University in Arlington, Virginia, has a Saints 24 convenience store with freshly prepared foods and snacks as well as toiletries.
- Just Walk Out technology is poised to land at other college campuses, through Amazon's partnership with mobile credential and payment solutions provider Transact Campus to handle payment data and monitor inventory. The University of Dayton in Ohio has the technology, and the University of Pittsburgh's The Market store will utilize it upon completion of a multimillion-dollar renovation to its dining facility. The technology has also been introduced at Loyola University in Maryland, allowing students, faculty and staff to shop on-campus convenience stores through the Grubhub app.
- Theme Parks:
- Six Flags is the first theme park to pilot the Just Walk Out technology. It is being soft launched at its New Jersey location, to cut wait times for customers buying food and drinks. If the launch is successful, Six Flags Magic Mountain in Los Angelis will then adopt the technology.
- Hospitals and Health Care Centers:
- Amazon has a new payment solution called "badge pay," where staff can pay for food and beverages by scanning their employee badge. The funds are taken from their payroll account Visitors can also utilize the technology, paying with their credit/debit cards or mobile wallets. The first hospital to offer the technology is St. Joseph's/Candler's Candler Hospital in Savannah, Georgia.
Amazon Pop Up
A themed section of top brands, frequently updated, such as Hearst Communications' Good Housekeeping Magazine holiday season opened a pop-up store. Amazon shuttered all nine locations in 2022.
Amazon Books
After contributing to the demise of many brick-and-mortar bookstores, Amazon debuted its first bookstore in 2015 and opened more around the U.S. Some include in-store coffee shops. In 2022, the retailer closed all 24 stores.
Amazon 4-Star
The format only stocked items that are rated at least four stars, are top sellers or are new and trending on Amazon’s website. Amazon closed all 33 locations in 2022.
Special Departments/Services
Special Department/Services
Amazon Web Services — a distinct revenue segment — provides cloud computing platforms to subscribers via remote servers, and continues to be the biggest driver of profit for Amazon. It encompasses more than 70 individual services ranging from computing, storage, networking, database, analytics, deployment, application services, management, mobile, blockchain, developer tools and tools for Internet of Things. In 2018, Amazon spent more than $13.6 billion on technology including software, hardware, services, telecommunications equipment and staff, making it the biggest corporate IT spender in the world, according to research from International Data Corp. AWS, in turn, is driving growth in Amazon's operating margins and growing its share of Amazon's total revenues. In 2018, Amazon also partnered with startup Kaleido to make it easier for AWS customers to put services on blockchain.
Amazon Home Services offers more than 1,200 services ranging from cleaning to plumbing from providers across 60 professions.
Among the multitude of additional, ever-expanding services the company provides are:
- Amazon Today: Sellers can showcase real-time inventory on Amazon.com, allowing local shoppers to have purchases delivered within a few hours, or opt for in-store pickup.
- Same-Day Delivery: Available to Prime members in several major metro areas throughout the U.S. Allows shoppers to buy from participating brands — including PacSun, GNC, SuperDry, and Diesel — via the Amazon app or Amazon.com. Some retailers offer BOPIS as well.
- Amazon Charts: The service makes public weekly lists that track the books that customers spend the most time reading. These lists go beyond just top-sellers to also include ones that are streamed on Audible, for example. Alexa will recite the lists when asked.
- Amazon Connect: customer service for consumers.
- Amazon Chime: cloud-based communication service.
- Fulfillment by Amazon: worldwide fulfillment network for third parties.
Flexible Payment Options: Amazon partnered with financial products and services company Affirm to enable qualified customers to pay for their purchases over time, with monthly payments and no interest or late fees. Amazon also offers the Afterpay flexible payment option via the Afterpay mobile app to pay in four interest-free installments.
Amazon Fresh Services
The degree of value that consumers attach to Amazon Fresh’s tech-driven convenience and omnichannel benefits also is a linchpin of its success.
- Dash Cart: A shopping cart built for small to medium-sized trips that automatically logs products placed inside and processes payment as shoppers leave the store. To pay, shoppers walk through a special Dash Cart lane, where sensors identify the cart and the items selected, and the transaction is processed using the credit card on their Amazon account — without a stop at the register. Dash Carts cannot be taken out of the store, meaning shoppers must transfer to a standard cart or carry their groceries to their cars. The carts also are designed for small- to medium-sized grocery trips, accommodating just two full bags. Amazon’s Alexa virtual assistant, accessed via the Dash Cart or at an in-store station, also helps shoppers manage shopping lists, find items in the store and access food-related information.
- Amazon One: Biometric palm print scanners enabling payment for goods in some stores by waving a palm print over the scanner. Amazon licenses the technology to other retailers and arenas, such as partnering with digital ticketing agency AXS to deploy Amazon One at standalone ticketing pedestals at the Red Rocks Amphitheatre concert venue in Morrison, Colorado.
- Order Ahead: An Amazon app tool dubbed Order Ahead lets Amazon Fresh shoppers place deli, meat, pizza and seafood orders; shop while they’re being prepared; and be notified when their items are ready for pickup at the service counter.
- Pickup and Returns: Amazon Fresh serves as a site for Amazon.com order pickup and product returns. At one point Amazon was testing Fresh Pickup, a drive-up grocery services, at two Seattle Amazon Fresh locations, but has since ended the service.
Amazon Go Services
Amazon’s new larger format Amazon Go store in Washington state offers Amazon.com Packageless Returns and features two Standard Level 2 Volta electric vehicle charging stations, which customers can use free, along with Blue Rhino Propane.
Amazon One Medical
Amazon is revamping its Amazon Clinic service, giving it a new name and offering it on a pay-per-visit basis and as a subscription service.
Now called Amazon One Medical, customers can choose either:
Amazon One Medical Pay-per-visit telehealth services — available on Amazon.com or through the Amazon mobile app — for more than 30 common conditions like colds, acne and asthma. Messaging visits are $29 and video visits, $49. Customers pay for care as they need it. Insurance is not accepted nor needed, but FSA/HSA payment is accepted.
Amazon One Medical Membership, where customers can pay for on-demand virtual care, same- and next-day appointments at One Medical offices, and primary care at more than 150 U.S. offices, for both new and ongoing conditions and other health concerns. Screenings are also available. Prime members pay a $9 monthly or $99 annual membership fee (and can add up to five additional family members for $6 a month per member or $66 a year), or $199 annually for all other customers. Membership also includes in-app Treat Me Now services for concerns such as cold and flu, allergies and more. (Not all appointments and lab services are covered by the fee, and are either billed to insurance or paid out of pocket.)
Health Condition Programs
Amazon is growing its online health offerings, with the goal of making it easier for consumers to discover and enroll in health benefits available through their employer or insurance program for conditions such as prediabetes, diabetes and high blood pressure. Its launch partner is digital healthcare provider Omada Health, which has more than 1,900 employer and health plan customers. People can visit the Amazon Health website to check their coverage. If they're eligible, they will be redirected to Omada's webpage to finish enrollment. From there, customers may be able to take advantage of connected devices, health coaching, nutrition planning and more.
Customer Segments
Customer Segments
Amazon has a broad and diverse customer base that runs the gamut in age and demographics, but the company's micro-level segmentation is based on actual purchase behavior and targets each customer individually.
Numerator offered demographic and psychographic data on the average Amazon shopper in its 2023 Amazon Retailer Snapshot. Among the findings:
- 81%: The number of U.S. households which shopped at least once at Amazon
- 99%: The customer repeat rate
- $2,262: The average Amazon shopper's annual spend. They made an average of 72 purchases that year, averaging nearly $37 per purchase
- Gen X and millennials are more likely to shop Amazon compared to all U.S shoppers
- 48% of Amazon shoppers are in the middle-income range, and 28% are high-income consumers
- 75% of Amazon shoppers are female
- Out of all Amazon shoppers:
- 67% are white
- 13% are Black/African-American
- 13% are Hispanic/Latino
- 6% are Asian
- 2% are other
- 68% of Amazon customers are homeowners
- 38% reside in suburban areas, 29% in rural areas, and 34% in urban areas
- Amazon shoppers are more prone to make impulse buys
Many of Amazon's services are focused on cities and target middle- and high-income consumers. Millennials also are especially keen on anything Amazon does and are more likely to be Prime members. Driving that membership is the company's primary focus.
Millennials rank Amazon as their top clothing retailer. Millennial consumers also are more likely than older cohorts to purchase products on Amazon in a wide swath of CPG categories, with the heaviest concentration of purchases registered in beauty, health and wellness, and personal care.
![Amazon Millennials](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2022-07/screen_shot_2017-06-29_at_9.27.42_am.png)
Other noteworthy customer segments include:
- Early adopters – Amazon gives this core group early access to new products and special benefits; in return they advocate for Amazon products through word-of-mouth advertising.
- New parents – Online baby products are a gateway category for e-commerce.
Regarding Amazon's acquisition of Whole Foods, some 81% of Whole Foods shoppers were already Amazon shoppers. Of all Whole Foods shoppers, more than half are Prime Members.
Internet Marketing
Internet Marketing
Amazon ranks fifth in total unique monthly visits among all multi-platform web properties in the U.S. — behind Google, Facebook, Yahoo and Microsoft — and it is the most used digital shopper touchpoint. Its search function has become the primary destination for information related to purchases, delivering more than half of all product searches (almost twice the rate of Google) regardless of whether the purchase is made online or in a store. Additionally, 90% of consumers either "always" or "often" check Amazon's listings even if they found the product they are looking for elsewhere.
Customer tracking is the company's stronghold. Arriving at Amazon's homepage — in addition to the usual rotating carousel ads shoppers are greeted with “Pick up where you left off,” “Keep shopping for,” and “Buy again,” hubs. The homepage also includes hubs for Prime Video and gaming along various deals (often seasonal). Tabs at the top of the homepage include, “Amazon Basics,” “Today’s Deals,” “Books,” Groceries" (including from Amazon Fresh and Whole Foods Markets), “Customer Service,” "Prime,” and “Toys & Games" and more.
Scrolling down the page, the site suggests products based on prior searches and purchases, sponsored featured products, a top deal of the day, best sellers in various categories (Toys & Games, Beauty & Personal Care, Home & Kitchen, etc.), grocery delivery or pickup with Prime.
In 2024, it launched a Valentine's Day Hub with curated gift suggestions and a "Get It by Tomorrow" feature that guarantees delivery by Valentine's Day (in eligible markets).
Amazon is also embracing shopping as entertainment. Amazon Live’s Shop livestream is a home shopping programming platform launched in 2019 that streams from Amazon.com. Amazon Live Creator is an app that lets brands and influencers stream video content directly on Amazon.com.
Finding that 75% of U.S. adults look at a mobile device while watching TV, in 2024 Amazon launched the FAST Channel, a new interactive, shoppable and free ad-supported channel on Prime Video and Freevee. U.S. customers can shop alongside favorite brands, creators and celebrities through Amazon's "shop the show" technology. Customers take their mobile device, open the Amazon Shopping app, and type "shop the show" into the search bar. From there they can browse, shop and engage with the content on the TV screen.
Amazon's influencer program lets influencers make money by directing their viewers to make purchases on Amazon.com via their Facebook, Twitter, Instagram, YouTube channels and, most recently, their livestreams. Amazon often taps social media influencers and mainstream celebrities to present curated shopping lists tied to special occasions.
Amazon has created a Premium Beauty hub billed as a one-stop shop for high-end beauty needs, offering a posh hair care department, beauty must-haves from top influencers, a spotlight on premium brands, and an Amazon Live component fronted by an influencer.
In 2024, Clinique opened a brand store on the Premium Beauty hub, one of a handful of The Estee Lauder Companies' portfolio to do so. The store includes the Clinique Skin Analysis tool, an interactive questionnaire created with input from Clinique's dermatologists, that will recommend a custom skincare regimen. The store also offers curated product selections, and both Premium and Prime customers get free shipping.
Kiehl's Since 1851 also has a store on the Premium Beauty hub. The L'Oreal USA brand is offering top-sellers and new launches.
Additionally, Amazon introduced online Luxury Stores in 2020 starting with designer Oscar de la Renta, and now encompasses 50 brands, including categories beyond clothing ranging from beauty, bags, ready-to-wear, footwear and perfume. Some of the brands carried through Luxury Stores include Christopher Kane, Rodarte and Jonathan Cohen. One of the tactics Amazon has used to try to attract both customers and designers is the promotion of exclusive capsule collections.
Pet-focused offerings from Amazon include Amazon Pet Profiles, which enable customers to receive personalized recommendations and coupons based on various factors, such as their pet’s breed, size and preferences.
Amazon recommends products that are similar to what is currently being searched for, related to items viewed in the past, or purchased by other people with similar searches or purchases. Rating purchased products and writing reviews further tailors the recommendations. The company collects data on people who may have never visited the site. Amazon derives 30% of its sales from recommendations.
Search is a big strength for Amazon. Marketers tap into that through Amazon's Sponsored Product Ads, which appear on product search results pages: 85% of searches have more than one ad unit at the top or right side of pages. Amazon also offers display units on the homepage and product pages.
In 2023, the retailer shared that it's extending its selling partner campaigns to apps and websites such as Pinterest, BuzzFeed, Hearst Newspapers and Raptive, as well as Ziff Davis brands such as Lifehacker and Mashable. Advertisers need not take any action to appear on these sites or apps. Relevant page context, the campaign and cost-per-click parameters that sellers have already established — as well as SKUs being in stock and bearing Prime delivery, ratings and accurate pricing details — will result in Sponsored Products ads automatically displaying when Amazon determines a customer is likely to be interested, which also will link right to the Amazon product page.
Reviews, too, are key. Amazon does not accept syndicated ratings or reviews, and has built a reputation for its trusted customer reviews, which influence positions in search results. The company even launched its consumer private label products with more than 20 reviews already in place.
Amazon has been filing lawsuits against alleged fake review posters as far back as 2015, and in 2022 and 2023 took legal actions against what it says are major fake review brokers. It also uses anti-fraud technology, artificial intelligence, automatic monitors, and human investigators to screen for fake reviews.
It's also teamed with Booking.com, Expedia Group, Glassdoor, Tripadvisor and Trustpilot to launch the global Coalition for Trusted Reviews. Its goals include seeking and establishing best practices for protecting consumers and partners from fake reviews. Amazon has also partnered with Microsoft and a federal enforcement agency in India to take action agains technology support fraud.
Amazon also has been testing generative artificial intelligence to summarize customer feedback and help shoppers find the right product. An accompanying AI-generated summary includes a disclaimer about the summary's origins and shares that it's been culled from customer reviews, providing a quick overview of likes and dislikes about the product. Shoppers can also filter reviews by selecting key product insights and frequently mentioned sentiments for a better understanding of whether a SKU is easy to use, for example.
AI and machine learning models collect and compare data from brands, product reviews and customer preferences to make size recommendations, including whether to size up or down or whether a garment has stretch or how it fits on specific body areas. Brands can also use the information to improve their product and/or product communication.
To help sellers, Amazon partnered with Nvidia, offering a generative AI tool that identifies product listings that could be improved and generates revised content including titles, bullet points, descriptions and product attributes. Sellers can then review the suggested changes, provide feedback if they'd like, and accept the revisions to their listing. Nearly 80% of sellers approve the changes with minimal edits.
In response to feedback from sellers with their own direct-to-consumer websites, Amazon is piloting a new tool that allows sellers to leverage existing listings by providing the e-merchant with a URL. Amazon's generative AI then parses the information to create listings for Amazon's store. The new capability will be made available to U.S. sellers in the first half of 2024.
The Amazon Brand Registry, a suite of tools to build and protect a brand on Amazon, also grew to include more than 700,000 active brands in 2021, an increase of 40% from the prior year.
The company's affiliate program is one of the most famous, historically letting anyone with a website post a link to Amazon.com and earn a commission. Amazon maintains a direct relationship with thousands of digital publishers and supply-side ad exchange Transparent Ad Marketplace, but has cut several third-party vendors from the program, a move seen as a cost-cutting and fraud-eliminating measure in response to COVID-19. Amazon also cut commissions rates across a number of categories, including furniture, home, home improvement, lawn and garden, pet, groceries as well as health and personal care.
Amazon also requires brands to integrate enhanced content into Amazon Central.
Amazon Assistant
Amazon Assistant is a free suite of software applications available for select browsers and operating systems that comes with features to help shoppers compare products and prices while searching and shopping online.
Retail Media
Retail Media
Amazon also is a fast-growing media platform in the U.S. in its own right, aggressively beefing up its initially quiet ad business in a market dominated by Facebook and Google and giving brands opportunities to leverage its media. The retailer is working to expand its range of ad options both on and off Amazon.com, including video ads. The company also now ranks third among digital ad platforms in the U.S.
Amazon’s advertising business generated $37.7 billion in revenue in 2022, increasing 20% year-over-year. The disclosure follows years of Amazon investing in the advertising business and keeping details private. Advertising gives Amazon twice the revenue that physical stores do, and it’s more sizable than the company’s subscription services, which include Prime memberships.
Most of Amazon’s ad revenue was driven by ads that appeared on the company’s e-commerce platform, with search ads for sponsored products and brands accounting for a large percentage of that revenue, according to the research firm.
Amazon’s share of the U.S. digital ad market was forecast to reach 14.6% by the end of 2023, primarily at the expense of Google and Facebook, said research firm eMarketer. Additionally, Amazon was projected to drive 77.7% of all U.S. retail media digital ad spend in 2022.
Brands invest on average 36% of their advertising spend on Amazon each month with 33% of brands investing more than $81,000 a month on Amazon advertising, said research firm Feedvisor. Additionally, top bracket spending on Amazon Advertising has increased over the past year with one in five brands (20%) now spending $100K or more compared to last year’s 11%. Advertising on Amazon is happening year-round, with 43% of brands consistently advertising throughout the year.
Acquiring new customers is the most popular goal for brands advertising on Amazon (61%), followed by driving brand awareness (56%), driving sales (53%), and gaining marketing share over competitors (45%).
Amazon continues to add to its advertising suite and has recently introduced video ads to their ever-expanding lineup. Feedvisor found 44% of brands now use Amazon video ads as part of their strategies.
Using Amazon’s Custom Advertising service, brands can build campaigns that engage consumers throughout the entire marketing funnel, building brand awareness, consideration, and conversion — whether or not they currently sell on Amazon. Some examples of campaigns include:
- Homepage takeovers,
- Fire TV placements,
- Customized destination pages,
- On-box advertising, and
- Multi-channel campaigns that include in-store displays in Amazon stores.
Until recently, Amazon put two or three sponsored products at the top of search results. Now, there may be as many as six sponsored products that appear ahead of any organic results, with more promotions elsewhere on the page. Amazon's own properties — such as Fire TV, a streaming media player, Twitch, a live streaming platform for gamers, and Freevee, an ad-supported streaming service — and ads sold through Amazon’s advertising technology to run on other platforms generate a smaller portion of ad revenue.
Amazon's goal is to balance customer experience with advertising at all times, be helpful to customers, and enhance their shopping and viewing experience, mostly with targeted recommendations based on info about preferences. Though it is not known for sharing data, Amazon increasingly works directly with many brands for deeper dives on retail analytics, like why things may be out of stock and how to price products and offers. The benefits of working directly with Amazon are greater speed and operational efficiency.
Among major milestones:
- In 2020, Amazon added Twitch to its larger Amazon Advertising umbrella, selling programmatic advertising on the livestreaming platform that's gradually expanding its programming beyond gaming. Marketers can buy video and display ads on Twitch as part of their campaigns among the e-commerce giant's various digital platforms. In 2022, Twitch introduced new ways to connect with creators through its owned channels and applications like Drops, a popular method of rewarding viewers for watching streams, along with a For Twitch, With Twitch program that carries curated creator-driven content aimed at helping brands better connect with Twitch viewers.
- In 2020, Amazon took Amazon Marketing Cloud (AMC) — a holistic measurement and analytics solution built on Amazon Web Services — into advanced beta testing by eligible advertisers including HP. The rollout is geared toward household brands and steps up the competition with rival advertising giants. Amazon advertisers can already use Amazon Attribution to measure the on-Amazon impact of their non-Amazon media. They can also measure brand preference, awareness, and brand lift of their Amazon Advertising campaigns through industry measurement partners. Amazon Marketing Cloud brings advertisers additional flexibility to understand the sequence of marketing touchpoints that deliver impact and build a comprehensive view of how to most effectively engage their audience.
In 2024, Amazon partnered with Stackline on a new "Multi-Retailer Attribution," where the AI-powered retail intelligence and activation platform uses proprietary audience technology and the AMC to measure consumer purchases across retailers and channels at the individual products level. Then that behavior can be connected back to shoppers who engaged with a brand's Amazon paid search, demand-side platform (DSP) or other media campaigns.
Amazon Advertising
Amazon had rebranded all of its in-house media services under the sole name "Amazon Advertising" in 2018, phasing out the names Amazon Media Group (AMG), Amazon Marketing Services (AMS), and Amazon Advertising Platform (AAP).
Amazon DSP (formerly AAP) offers programmatic buying (desktop and mobile web display ads, mobile app banner ads, mobile interstitial ads and in-stream video ads that reach Amazon shoppers everywhere), while Advertising Console (formerly AMS) offers self-serve, pay-per-click paid search in three ad formats (sponsored products, sponsored brands and product display ads) as well as Amazon Stores that let brand owners create their “in-store” experience on Amazon (customizable templates and a brand-specific Amazon URL). Advertising Console is only available for brands that sell on Amazon, and ad placements appear only on Amazon.
The retailer is weighing policies that would incentivize creators to run more ads and adjust the revenue cut top streamers receive from subscriptions. Amazon continues to round out its advertising suite. It’s putting out a Streaming TV Media Planner that allows brands to track incremental reach via Amazon Ads and compare their results to linear channels. Another product in beta, Omnichannel Metrics, tries to enable in-flight campaign optimization, while an Amazon Brand Lift capability assesses campaign impact based on metrics like awareness and purchase intent.
Amazon Advertising encompasses:
- Sponsored Products and Sponsored Brands allow advertisers to promote their products or brand to make it even easier for customers to discover and purchase products on Amazon.
- In the second half of 2023, Amazon began letting non-endemic advertisers launch sponsored display campaigns.
- Display ads reach relevant audiences on Amazon and third-party sites and apps using customizable brand or e-commerce creatives (dynamic ads, add-to-list, subscribe & save and coupon ads with features like add-to-cart buttons or customer reviews, plus non-standard media such as billboards below the fold, daily deals site stripes, marquee ads, offer listings stripes and seller central ads), and actionable insights to help advertisers optimize ads to achieve various objectives. Product Display Ads are also available for advertisers who sell products on Amazon to drive traffic to their product detail pages.
- Video ads help advertisers tell their brand story and engage customers in brand-safe environments via trusted channels like Amazon and Freevee, rebranded from IMDB TV, on exclusive Amazon devices, such as Fire TV or Fire tablet, (with a unique ad experience for each device), and across third-party sites and apps. Video ads include mobile "video in search" ads, a premium ad product that requires a marketing budget of $35,000 or more to get started. The ads are shown below the fold in the search results for keywords selected by the advertiser. Customers can then click on the ad to see the product's details page or to see another landing page such as a merchant's storefront on Amazon. In 2022, ad-supported streamer Freevee from Amazon expanded its content slate and experimented with new methods of advertiser integration, the following year testing an interactive pause ad format with shoppable calls to action. (Amazon has since brought interactive pause ads to Prime Video.) Both Prime Video and Freevee originals offer a Virtual Product Placement tool that can drop approved brands into programming on a plug-and-play basis after filming has wrapped. Amazon also has streaming rights to NFL Thursday Night Football and is promising advertisers additional layers of interactivity, such as dynamic stat displays, an X-ray feature, Twitch integrations and a new tool that creates ultra-low latency for live broadcasts. The most recently added capabilities allow advertisers to simultaneously target ads at different football viewers based on geographic, demographic and behavioral data; and enable interactive Fire TV ads that respond to voice command. In 2023, Prime Video streamed the first-ever NFL "Black Friday Football" game, which anyone with an Amazon account could watch. Viewers could also shop special deals and limited-quantity products from brands such as Dyson, LEGO and Nintendo.
- Stores allow vendors and sellers to create their own website, with its own branded URL, on Amazon. Vendors and sellers can use a Store to showcase a brand story and product portfolio in a curated customer destination.
- Its measurement solutions, including campaign reporting, retail insights, and third-party reporting, help businesses understand advertising’s impact on shopper behavior—whether they run on Amazon or on third-party sites and apps—so they can optimize marketing strategies to achieve results.
- Amazon Ad Console: Advertisers click their product and select "Generate." Using product details, an AI-powered image is created, producing background imagery to create more engaging ads. Currently the feature is being tested among select advertisers; their feedback will be used to shape its development.
- Sponsored TV, a self-service ad solution that allows brands to run streaming TV campaigns on Freevee, Twitch and third-party Fire TV apps.
The retailer also broadened its shoppable content reach via a partnership with Pinterest to run third-party ads on the platform.
Amazon DSP Metrics
A report by digital marketing platform Acadia identified 23 next-generation metrics that brands could use to better maximize the DSP's potential. |
Amazon DSP is a demand-side platform that allows advertisers to programmatically reach their audiences both on Amazon sites and apps as well as through our direct publisher relationships and third-party exchanges. Advertisers can manage, optimize, and report on their programmatic display and video campaigns through the Amazon DSP console.
Detailed advertising specifications and policies are available on the company's website: https://advertising.amazon.com/ad-specs/en/
According to an ROI Genome report by Analytic Partners, Amazon advertising has a 20% higher return on investment (ROI) compared to a brand's average marketing ROI. Nearly half (48%) of paid Amazon display advertising impacted non-Amazon sales, pointing to how consumers use Amazon as a comparison shopping tool even when making purchases elsewhere, per the report. However, only 29% of paid Amazon search advertising impacted such sales, suggesting that shoppers are further down the sales funnel when making these purchases and are ready to buy on Amazon.
Among brands that sell on Amazon, 57% are advertising on the site, according to Feedvisor. Other findings from Feedvisor's report:
- 49% of brands selling on Amazon spend more than $40,000 per month on advertising on the site, and 38% spend more than $60,000 each month.
- Brands in the pet supplies category spend more than $100,000 per month, and the toys and games category spends between $60,000 and $80,000.
- 74% of brands are advertising on Amazon to attract new customers, while 59% want to drive brand awareness.
- 49% of brands are using the platform to generate leads and 45% to drive sales.
Store Analytics
Amazon introduced Store Analytics, a service offering CPG brands aggregated and anonymized insights about the performance of their products, promotions and ad campaigns in Just Walk Out- and Amazon Dash Cart-enabled Amazon Go and Amazon Fresh stores in the U.S. (Though Amazon is replacing Just Walk Out technology with Dash Carts in its Fresh stores.) These insights also help those same stores continuously improve the shopper experience by making the store layout easier for shoppers to find their favorite items and discover new ones, improving selection and availability of products, and delivering value through relevant promotions and advertising.
Trends Report
For the past five years, brand marketers were asked to rate various retail media platforms for Path to Purchase Institute’s annual Trends Report. In the magazine's 2024 Trends Report, Amazon generally earned "excellent/very good" and "good" scores across all metrics, particularly on targeting effectiveness and measurement capabilities. (See chart below.)
![amazon retail media 2024](https://assets1.p2pi.com/s3fs-public/styles/hero/public/2024-01/amazon.png)
Key Facts
The chart below has information compiled by The Mars Agency. It is published as part of THE AGENCY'S quarterly Retail Media Report Card, with input provided by the retail media networks
![Amazon Advertising RMN Mars Agency](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2023-03/amazonrmnmars.png)
Mobile Marketing
Mobile Marketing
More than 7 out of 10 Amazon customers shop from their smartphones, and a growing portion do so within the Amazon app with 55% of Prime members engaging. It boasts a streamlined, lightning-fast interface bolstered by one-click ordering, as well as a slew of experimental functionalities beyond standard offerings, letting users:
- solicit personalized fashion feedback from live stylists.
- judge some 15,000 top furnishing items against home decor by employing augmented reality.
- immediately link to the Amazon page of any real-world object with the point of a camera (the image recognition functionality is surprisingly accurate).
- use "shoppable" stickers to decorate photos taken within the app (a puzzling functionality).
- use an "outfit compare" feature that lets Prime members upload side-by-side photos of themselves in two different outfits to receive a judgment from Amazon's fashion specialists within minutes.
- a generative AI tool that provides answers to commonly asked customer questions, found via the "looking for specific info" option on product pages.
Exclusive entertainment content also makes the app more enticing.
Key by Amazon (formerly Amazon Key): Provides keyless entry, remote lock and unlock, and guest access services to homes nationwide when used with one of 10 compatible locks. It also enables delivery of eligible orders directly to garages nationwide, as well as homes or compatible vehicles in 50 U.S. markets.
Alexa Shopping List Savings: A feature for the digital assistant launched in 2022 that lets shoppers clip coupons in the Alexa app for items they added to their shopping list. The U.S.-only service is available to all customers and works exclusively with the Alexa app’s pre-installed shopping list.
SideChef: Available in the Amazon Fresh “recipe” section on the Amazon app and website are more than 11,0000 shoppable recipes from the cooking platform SideChef. SideChef provides interactive smart recipes with guidance featuring hands-free voice commands, step-by-step photos, how-to videos and built-in times. All recipe ingredients can be added to a digital cart for an in-store pickup or delivery order. SideChef also can be accessed on the “What to Eat?” feature on Amazon’s Alexa, which also offers Blue Apron’s recipes and the ability to order.
Amazon Inspire: An in-app content platform offers users a custom TikTok-esque feed of videos and photos with shoppable links to products.
Consult-a-Friend: An in-app feature that Amazon made available to all customers in the U.S., Australia, Belgium, France, Germany, India, Italy, Mexico, Netherlands, Poland, Spain, Saudi Arabia, Singapore, Sweden, Turkey, U.A.E. and the U.K. It allows users to request, view and manage feedback from family and friends. Users select the product, tap "share" and choose their preferred messaging app and recipients. Recipients can respond with an emoji or add commentary.
![Amazon Volkswagen](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2022-07/small-15076-volkswagencreatesvirtualdrivingexperienceaccessibleonamazonboxes.jpg)
Augmented Reality
Amazon continues to slowly build its presence in the augmented reality (AR)-assisted shopping space:
- Virtual Try-On for Shoes: In an effort to help shoppers find the perfect footwear, Amazon launched the Virtual Try-On for Shoes, an interactive mobile offering that uses augmented reality to help visualize how a pair of shoes will look from every angle. Shoppers in the U.S. and Canada can use the new service via the Amazon iOS shopping app to visualize thousands of sneaker styles from select major brands.
- Volkswagen: In 2022, Volkswagen is promoting its 2022 Taos SUV with a web-based augmented reality (AR) driving experience available by scanning QR codes on more than 1 million select Amazon boxes and offering three free months of Amazon Music Unlimited.
- Made for You: In 2020, Amazon unveiled a new service, “Made for You,” that crosses the digital/real world divide with virtual body doubles, allowing customers to customize a T-shirt to their exact measurements.
- Virtual Cosmetics Try-On: In 2019, Amazon launched a virtual cosmetic try-on experience. Customers can use their mobile phone camera to digitally try on different shades of lipstick in a live video of themselves, or on a selfie. Amazon leverages augmented reality technology from ModiFace, which runs on its Amazon Web Services platform.
![Rufus](https://assets1.p2pi.com/s3fs-public/styles/hero/public/2024-02/rufus.png)
Amazon Rufus
Amazon piloted Rufus, a generative AI-powered expert shopping assistant, in February 2024.
Rufus takes information from Amazon’s product catalog, customer reviews and Q&As, and from across the web to answer shoppers’ questions.
Customers can use Rufus to conduct general product research, shop by occasion or purpose, compare products and product categories, get recommendations, and ask for details about a specific product.
Currently Rufus is in beta mode, made available to select customers after updating their Amazon Shopping app. They can simply type or speak their questions into the search bar, and a Rufus chat dialog box will appear at the bottom of their screen. Customers can keep the dialog going to get more information, or swipe down to dismiss Rufus.
The e-tailer plans to progressively expand Rufus to additional U.S. customers in the weeks to come.
Amazon One
In 2024, Amazon introduced the Amazon One app, designed to streamline the shopping process for users of its palm-recognition service. (See Store Formats/Growth.)
Previously, to sign up for the service customers had to insert their credit card in an Amazon One device at a brick-and-mortar retailer and then hover their palm over the device and follow the prompts to link the card to the palm signature being scanned by its computer vision technology in real time.
Now customers can download the Amazon One app. There, they can either create a profile or link their existing Amazon account with Amazon One, taking a photo of their palm (or palms), adding a payment method. The app links to one's Prime profile, if applicable, and with location tracking enabled, will show users where they can use the technology.
The profile is activated the first time Amazon One is used. If it is not used within 45 days of signing up, the profile is deleted, for security purposes.
Amzaon One is available for iOs and Android devices.
Social Media
Social Media
On most social media platforms, Amazon operates numerous curated accounts targeting separate types of audiences but operating with a similar strategy as the main Amazon accounts. Examples include Amazon Fashion, Amazon Mexico, Alexa, Prime Student and Amazon Home.
Amazon has teamed with Meta and Snapchat to offer enhanced, in-app shopping experiences. Prime members can buy products directly on the platforms.
Facebook: 29 million followers (as of November 2023)
Not a prolific presence on the platform, but Amazon posts nearly daily. A “Shop on Website” button links to the “Epic Daily Deals” page of Amazon.com. Posts generally do not advertise specific products but rather spotlight Amazon programs, cause initiatives, employee stories and gift ideas.
X, formerly known as Twitter: 5.9 million followers (as of November 2023)
Updates mirror those on Facebook but also make an effort to further engage this audience through witty one-liners, banter with other accounts, surveys and by retweeting relevant tweets. Also operates @AmazonHelp (501.1K followers) for customer support in several languages and @AmazonNews (242.2K followers) for the latest news from the retailer.
Instagram: 4.5 million followers (as of November 2023)
Updates mirror those on Facebook. An often-updated bio link promotes anything from individual Black businesses who sell through Amazon, products that are eco-friendly, and ways to support small businesses during the COVID-19 pandemic. Occasional temporary stories on the platform tell employee narratives and promote new cause initiatives.
YouTube: 557K subscribers (as of November 2023)
The retailer posts every couple weeks. Videos share employee satisfaction stories, provide tech tips for private label electronics, and share TV spots, seasonal promotions and new company initiatives.
Pinterest: 1.3 million followers (as of November 2023)
The retailer maintains a consistent presence on Pinterest by creating pins with seasonal relevance, home decor ideas, and family-friendly home improvement products. The shoppable pins link to seasonal shops, specific search result pages or individual product pages within amazon.com.
TikTok: 883.4K followers (as of November 2023)
Amazon launched its TikTok presence during the COVID-19 pandemic. Short videos glorify receiving packages at home. The bio link is regularly updated with the retailer’s current promotion, such as the latest TV spot.
Some brands, particularly in the beauty category, have realized the value of Amazon as a TikTok sales pipeline. According to a report by Similarweb tracking product sales, beauty products that went viral on TikTok earned an average of 85.3% month-on-month sales growth on Amazon.
E-Commerce
![Amazon Easy Reorder](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2022-07/amazon_easy_reorder.png)
E-Commerce Strategy
Amazon offers a highly personalized shopping experience on its website, greeting visitors by name, showing shoppers their purchase history and making suggestions that demonstrate an understanding of each shopper as an individual.
An overview of U.S. grocery e-commerce by Coresight Research in 2022 noted Amazon is the most shopped online grocery retailer, followed closely by Walmart. However, its shoppers appear to have smaller grocery baskets in comparison to other large retailers — an issue the retailer has grappled with for years. More than 30% of respondents in Coresight’s survey said they do “most” to “all” of their grocery shopping at Walmart, Target, Sam’s Club and Costco, while 27.5% said the same for Amazon. A little over half said they do “almost none or a small amount” of their grocery shopping with Amazon, while between 40% to 47.2% said the same for the other four retailers.
Of the major retailers Coresight studied, Amazon had the largest decline in online grocery shoppers – 11 percentage points – between 2020 and 2022, while Walmart only saw a 1.8 percentage point drop during the same period.
Research firm eMarketer said Amazon would account for 39.5% of all U.S. retail e-commerce sales in 2022, or nearly $2 in $5 spent online.
Marketplace
Amazon's third-party seller marketplace lets the retailer offer an endless-aisle experience without incurring associated inventory costs. Amazon has more than 2 million sellers globally (adding almost 3,000 third-party sellers to its various online marketplaces each day) and 461,000 active sellers are based in the U.S., according to e-commerce research firm Marketplace Pulse. Amazon also owns other e-commerce sites, like Woot.com, Shopbop.com and Zappos.com.
Invite-Only
In a move to prevent inventory shortages and price gouging, the retailer created an invite-only program for high-demand products like video game consoles. Shoppers can request invitations to purchase “a high-demand, low supply item” by clicking the “Request Invitation” tab on the product detail page. The program started in the U.S. with PlayStation 5 and Xbox Series X video game consoles sold and fulfilled by Amazon.
Department Performance Report
Data platform Analytic Index compiles Department Performance Reports on Amazon.com and other retailers. providing a holistic overview of major departments and information about sales, sponsored search, and organic search for each. To view a specific month's report, click on the link below:
Amazon Department Performance Reports
- May 2023
- June 2023
- July 2023
- August 2023
- September 2023
- October 2023
- November 2023
- December 2023
- 2023 Recap
- January 2024
- February 2024
- March 2024
Most Active Advertisers, January-October 2023
Amazon UK Department Performance Reports, 2023 Recap
Prime Day Recaps
Cyber 5 Recaps
Category Insights: Back to School, July-August 2023
Category Insights: Halloween Candy, October 2023
Fulfillment
Fulfillment by Amazon (FBA) is a huge piece of Amazon's e-commerce business. To have their inventory stored in Amazon's fulfillment centers and to make use of the company's supply chain and shipping operations, merchants pay a fee. Multiple increases in 2022, including an average 5.2% cost-related fee hike in January plus another 5% fuel and inflation fee levied in April, have caused tension in the relationship. For the 2022 holiday season, Amazon implemented a temporary fulfillment fee increase for third-party sellers, citing climbing expenses as the reason.
Additionally, Amazon added a new extra-large storage type, in addition to the standard-size, oversize, apparel and footwear storage types it already has in place. Amazon also adjusted the price threshold for its U.S. small and light program to $10 from $8. The retailer has a history of making adjustments to FBA inventory limits with little to no warning. For example, in 2021 several third-party sellers were told that Amazon had reduced their maximum inventory capacity for oversize products from 60% to 25%.
A large chunk of third-party sellers use Amazon FBA to fulfill orders. According to Jungle Scout, 68% only use FBA while 21% use both FBA and Fulfillment by Merchant (FBM).
In 2023, Amazon revived its Seller-Fulfilled Prime program and began accepting seller applications. The program allows merchants to add the Prime badge to their profile while they fulfill orders to domestic Prime customers.
Amazon continues to move ahead, in 2022 launching a $1 billion venture investment program for logistics and fulfillment technology called the Amazon Industrial Innovation Fund (AIIF). Increasing shopper demand for online shopping and fast delivery led it to create the fund. The AIIF will focus on companies of all stages that work in the areas of robotics, artificial intelligence, machine learning, autonomy and other emerging technologies.
That same year, Amazon said it would delay or cancel plans to build – or shutter outright – more than 60 delivery stations and warehouses in its distribution network after the retailer acknowledged it overbuilt its warehouse footprint. However, while some facilities are being closed or delayed, Amazon continues to open new facilities or enhance them, in certain markets. Early 2023 reports indicate that Amazon intends to add combination mini fulfillment centers and delivery stations in an effort to expand its same-day delivery service. The sub-same day delivery station (SSD) will let shoppers choose from Amazon's top 100,000 SKUs — possibly with added fees — for delivery within four hours. Amazon had 46 SSD centers in early 2023, and is planning to triple that number within five years.
In 2023, Amazon launched Supply Chain by Amazon, an end-to-end fully automated set of services to move products from manufacturer to customer around the world. The capabilities it offers include global logistics, warehousing and distribution, multi-channel distribution and automatic inventory replenishment into Amazon fulfillment centers (aided by machine learning to help meet expected demand). Pricing hinges on several factors, including types of goods and the seller's distribution channels.
That same year, Amazon launched a program called Hub Delivery, where it is recruiting 2,500 local business partners in 23 states. Partners receive on average 30 packages daily from Amazon, which they will be tasked with delivering some point that same day. Partners will use their own vehicles, staff and devices, and sync with Amazon technology.
Amazon's fulfillment innovations are key to its e-commerce success. Among them:
- Shipping options: Include free two-day delivery, next-day, same-day as well as two-hour and one-hour options in some urban centers.
- Amazon Fresh: A grocery service offering perishable and packaged foods. It's available to Prime members, who can reserve a time for drive-up pickup with as little notice as 15 minutes and no minimum order. In 2023, Amazon Fresh piloted grocery delivery for non-Prime customers in a dozen U.S. cities. before expanding the service to include all customers where Amazon Fresh was previously only available to Prime members. Amazon continues to expand its grocery delivery services. (See Grocery Delivery, below.)
- Returns: Amazon for a time had been expanding free, easy returns to millions of items. The retailer allows returns at more than 18,000 locations, including the option to drop off items without a box or label at Kohl’s, Staples, Whole Foods Markets and Amazon Fresh stores. Amazon also is increasingly allowing customers to keep some “returned” items while still refunding them. The e-commerce retailer has begun to charge a $1 fee for some returns at UPS stores if there is another free-return site the same distance or closer, a move that appears designed to trim the cost of returns and to build up its own delivery business.
- Subscribe & Save: The subscription program offers a discounted price on an item (usually sold in bulk), free shipping and automatic deliveries at designated times.
- Amazon Robotics: Tech continues to improve and add efficiency to fulfillment. The retailer has more than 520,000 robotic drive units and more than a dozen types of robotic systems in its facilities. Amazon’s recent robotics innovations include:
- Inventory Robotics: Amazon recently patented technology to allow robots that transport inventory in warehouses to take on more tasks, such as taking inventory, mopping, sweeping and waxing floors. The new tech would further automate Amazon's already highly robotized fulfillment centers by giving the existing fleet new, interchangeable tools. The retailer also is using artificial intelligence to determine where to place its inventory, thereby reducing distance from customers and speeding fulfillment.
- Proteus: In 2022, Amazon developed Proteus, a fully autonomous mobile robot, which lifts and moves package-carrying carts through its facilities. Proteus was first deployed in outbound handling areas for GoCarts, non-automated, wheeled transports used to move packages.
- Cardinal: A “robotic workcell” that selects, lifts and reads the label of a specific package out of a pile and then places the selected package in a GoCart. It converts batch-based manual work into continuous, automated work. Amazon is testing a prototype to handle packages up to 50 pounds, and it expects to deploy it in fulfillment centers in 2023.
- Amazon Robotics Identification (AR ID): An AI-powered scanning capability that uses a camera system to remove the manual scanning process. Scanning at Amazon fulfillment centers is currently done manually.
- Containerized Storage System: A system that can find a container with a needed product, figure out how to move it to the employee and pick up the container once the employee has retrieved the product.
- Sparrow: A robotic system that streamlines fulfillment by detecting, selecting and moving individual products prior to packaging.
- Sequoia: A system that helps process inventory at fulfillment centers at a faster rate, so items can be listed for sale on Amazon.com more rapidly, improving prediction of shipping times and increasing the amount of goods available for same- or next-day shipping.
- Digit: A bipedal robot developed through Amazon's partnership with Agility Robotics. Digit can move, grasp and handle items; its size and shape makes it suitable to work in areas designed for humans. Initially, Digit is being used to help with repetitive tasks like tote recycling, once workers remove the containers' inventory.
- Hercules: The most broadly deployed robot in Amazon's operations. It travels around Amazon facilities to retrieve shelves of products and deliver them to employees who then can pick items ordered for shipping. It can lift up to 1,250 pounds and travel across wide distances. It also has forward-facing 3D camera that identifies people, pods, other robots and items in its path.
- Titan: A. mobile robot that can lift up to 2,500 pounds, twice the weight that Hercules can. That capacity enables it to carry larger and bulkier items like small household appliances or pallets of pet food. It's armed with computer vision, obstacle detection, and user control systems.
- Drone delivery: After almost a decade of development, Amazon moved beyond the pilot stage in Prime Air drone deliveries. In 2022, Amazon shoppers in Lockeford, California, became the first to receive Prime Air Drone deliveries, fulfilled in less than one hour from the time a digital order is placed. That was followed by a second drone delivery location – College Station, Texas, which also began delivering medications for Amazon Pharmacy in 2023. In 2024, drone deliveries will be offered in the Phoenix metro area. The Phoenix deliveries will deploy from facilities next to Amazon's Tolleson same-day delivery site. Amazon is also expanding its same day delivery of prescription medications, not only via drone but also via other methods. (See below.) Amazon has created more than two dozen Prime Air delivery drone prototypes. The retailer also says the electric drones are part of its Shipment Zero program intended to make all Amazon shipments net zero carbon by 2030. (See Cause/Community Programs.)
- Tackling package theft: Amazon has completed its purchase of video doorbell maker Ring, which claims its product can deter package theft by allowing the homeowner to speak through the device's speaker to warn thieves they're on camera. Amazon also is in talks with smart license plate maker Phrame to ship packages to customers' car trunks.
- Seller Flex: Amazon Seller Flex program was introduced for sellers to offer shipping benefits and better stock control.
- Photo on Delivery: A program that launched in 2017 has a small set of Amazon's delivery providers taking a picture of where they put a package. The photo is included in the notice of delivery received by shoppers so they know when the package arrived and where to look for it.
- Key In-Garage Delivery: The smart entry program provides free in-garage delivery to Prime customers in select U.S. cities and surrounding areas. Customers need a myQ smart garage control (available at Amazon.com). They then can link the garage door to Amazon Key in the Amazon app and activate In-Garage Delivery. At checkout they can choose "free Key Delivery" where they will receive real-time notifications. Drivers receive a one-time code to securely open the customer's garage, which is followed with verification upon delivery. Customers can also use a camera to watch deliveries in real time.
- Electric Delivery System: Since 2019, Amazon has been piloting Scout, a proprietary, fully-electric delivery system, in select neighborhoods including Snohomish County, Washington; Irvine, California; Franklin, Tennessee; and Atlanta. Scout devices are described by Amazon as being the size of a “small cooler” and traveling on sidewalks at a “walking pace.”
- Local Selling: In 2021, Amazon began enabling local, regional and national retailers to offer both in-store pickup and fast delivery to local shoppers. Best Buy is among initial retailer partners.
- Hub by Amazon: The customizable delivery locker units were first introduced as a housing complex solution in 2017. The units can now be found in a wider array of locations, including college campuses, Whole Foods Markets and 7-Eleven stores, as well as Blink Fitness and Chase bank locations. Amazon wants to evaluate more than 1,000 new possible locker locations every month.
- Amazon Air: The retailer operates more than 45 air sites across the U.S.
- Micromobility Hub: In 2022, Amazon began making deliveries in London, its first U.K. “micromobility hub,” on foot and bike with walkers and electric cargo bikes that resemble minivans with the goal of making more sustainable deliveries. The retailer plans to open additional hubs in the U.K. in the coming months.
- Rite Aid: In 2023, Amazon partnered with the drug store chain to offer 2-hour delivery to Prime members in select Newark, New Jersey, and Burbank, California zip codes.
Amazon Logistics is a small but growing, Amazon-controlled delivery network that is distinct from companies such as UPS, the U.S. Postal Service and FedEx with which Amazon contracts for the lion’s share of its U.S. deliveries.
Packaging
Amazon has had a Frustration-Free Packaging Program for more than a decade, making packaging easier for consumers to open while decreasing materials.
New certification guidelines went into effect in 2019, in an effort to increase use of vendor-supplied packaging without "overboxing."
Grocery Delivery
Same-day grocery delivery and pick up are offered directly from Amazon Fresh stores, and shoppers retrieve their orders at a service counter or by parking in a designated pickup spot.
In 2024, Amazon introduced a new grocery delivery subscription service, available to Prime members and customers using EBT in more than 3,500 communities across the U.S. Prime members can subscribe for $9.99 a month, and they receive unlimited grocery delivery on orders over $35 from Amazon Fresh, Whole Foods Market, and several local grocery and specialty retailers on Amazon.com. Subscribers can also get access to additional delivery and pickup options, including one-hour delivery windows, 30-minute pickup, and priority access to Recurring Reservations services.
Recurring Reservations lets customers reserve a preferred pickup or delivery time each week. Customers can add items to their order before the shopper begins picking groceries. They pay only when they're ready for checkout, and the feature can be modified or canceled without obligation.
Amazon also offers a Repeat Items service, which allows customers to have items automatically added to their carts — such as milk once a week — according to their preferred schedule, and modify as needed.
Customers with registered EBT cards can get the same grocery subscription benefits without a Prime membership for $4.99 a month.
Grubhub
In 2022, Amazon acquired a 2% stake, which could grow to a 15% stake based on performance, in Dutch restaurant delivery company Just Eat Takeaway.com, which runs Grubhub and other food delivery operations in the U.S., Canada, U.K., Europe and elsewhere. As part of the partnership, Amazon is offering U.S. Prime members a free year-long Grubhub+ membership, with no delivery fees on orders more than $12.
Amazon Pharmacy
Amazon continues to grow its same-day prescription delivery, including to New York City and the greater L.A. area in early 2024. It also plans to grow the service to more than a dozen cities by the end of the year. Medications are delivered in a variety of ways, depending on the area. E-bikes will be used in heavy traffic areas such as Manhattan; drones, in College Station, Texas; and in suburban areas, Rivian all-electric vans and other commercial vehicles.
Amazon also has introduced a coupon feature in its Amazon Pharmacy, which automatically applies manufacturer-sponsored coupons directly to eligible orders on both the website and app.
In 2024, Amazon Pharmacy became a third-party dispensing provider for LillyDirect Pharmacy Solutions, providing home delivery for select Lilly prescription drugs, including varieties of insulin, obesity and migraine medications.
Amazon Anywhere
Amazon added a new immersive shopping experience called Amazon Anywhere. People playing Peridot, Niantic's (Pokemon Go's creators) real-world augmented reality game, can keep virtual pets and shop in-game merchandise.
Circulars & Publications
![Amazon 2023 holiday catalog](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2023-10/amazon2023holiday.jpg)
Circulars and Publications
Amazon Fresh distributes a weekly circular with Wednesday through Tuesday sales dates. The four-page broadsheet advertises Amazon’s own brands along with heavily advertising national brands and produce. The circular often offers a coupon, such as “Get $20 off when you spend $40,” with a QR code for shopping online. The circular also advertises Amazon services, such as Amazon Dash Cart, free in-store pickup and returns for Amazon packages and the Amazon Prime Rewards Visa.
During the holiday season, Amazon delivers a direct-mail catalog. For 2023, the catalog featured items across multiple categories and price ranges, and included shoppable QR codes.
Loyalty Programs
Loyalty Programs
Amazon Prime, a laughable membership concept at its launch in 2005, has become central to almost every new consumer initiative from Amazon, boasting more than 200 million members worldwide. For 2022, about 168 million of those are in the U.S., according to Consumer Intelligence Research Partners. When Amazon launched Prime in 2005, it offered free two-day shipping on one million items. Fast forward to 2024, where Prime offers more than 300 million items, including tens of millions available with same day or one-day delivery.
The plan’s amenities include free shipping, benefits at Whole Foods (5% back on purchases and free, one-hour pickup), lower costs for in-skill purchasing via Alexa and, most recently, a new prescription benefit dubbed RxPass that for $5 a month lets members get as many drugs as they need, including Medicare beneficiaries, from a list of more than 50 generic medications used to treat common conditions.
Membership also gives participants access to streaming video, music, e-books and a variety of other Amazon-specific services and deals. Additionally, a monthly option and a plan solely for video streaming is available, as well as discounts for students and people on government assistance.
Many of Amazon's private label products are available only to its Prime members, fueling a positive spiral and giving people another reason to join the lucrative program.
In 2022, Amazon raised the price of its Prime membership, citing the “continued expansion of Prime member benefits as well as the rise in wages and transportation costs.” The monthly fee for U.S. membership increased from $12.99 to $14.99, with the annual membership going from $119 to $139, marking the first time Amazon has raised the price of Prime since 2018.
In 2023, the retailer raised the order size for free Amazon Fresh delivery, to $150, before lowering the total to $100. Fees range from $3.95 to $9.95, depending on the order's total.
Among the various benefits:
- Free two-day shipping on eligible items in the U.S.
- Free same-day delivery in eligible ZIP codes across some 30 U.S. cities
- 20% discount on selected everyday items at Amazon Fresh stores along with weekly rotating assortment of prepared foods
- Credit toward music, video and e-book purchases for members that choose free, no-rush shipping (which takes five to seven days)
- Prime Video: unlimited streaming of movies and TV episodes. In early 2024, Amazon began running ads on Prime Video shows and movies in the U.S., U.K., Germany and Canada, followed by France, Italy, Spain, Mexico and Australia later in the year. U.S.Prime members can opt for an ad-free option for an additional $2.99 per month. (Live event content such as sports will continue to include ads.)
- Prime Studios: creates original content for Prime Video
- Prime Music: unlimited, ad-free access to more than a million songs
- Prime Photos: unlimited photo storage
- Kindle Owners' Lending Library: lets members borrow eligible books for one month
- Prime Reload: the program offers Prime members a 2% cash-back bonus of Amazon credit if they're willing to pay using their debit card instead of a credit card
- Discounts such as 20% off diapers through Amazon's subscription service or 20% off new, physical video games and free, release-date delivery
- Prime Early Access: 30-minute early access to "Lightning Deals"
- NFL Games: Amazon broadcasts NFL Thursday night games exclusively to members
- U.S. prime members can sign up for a free one-year Grubhub+ membership and access unlimited free delivery from thousands of restaurants on Grubhub
- Prime Try Before You Buy: an apparel service (formerly dubbed Prime Wardrobe) that lets Prime members order three items or more with no upfront charge, and take a week to decide and pay for items they want to keep. Unlike popular services like Stitch Fix, it is not a recurring subscription; participants instead choose from one million eligible apparel, footwear and accessories items from brands including Calvin Klein, Levi's, Timex and Cartier. Members get 10% off if they keep three or four items and 20% off if they keep five or more. Shipments arrive with a prepaid return label and can be picked up from the shopper’s home for free
- Exclusive access to select private label products as well as some uber-popular items such as new video games or consoles
- Free shipping on deal site woot.com.
In December 2023, Amazon piloted a grocery subscription for Prime members. They can pay $9.99 a month to get "unlimited" groceries delivered from Amazon Fresh and Whole Foods Market on orders exceeding $35. The program is being tested in three communities: Sacramento, Calif., Columbus, Ohio, and Denver.
One Medical
A new feature of Prime is access to One Medical's on-demand virtual care and office visits. Prime members can sign up for the service and schedule same- and next-day remote and in-person appointments at hundreds of One Medical primary care offices nationwide. Customers can pay out of pocket or use their insurance. The benefit costs Prime members $9 a month or $99 a year. Additional family members can be added at an extra $6 per month per person (up to five add-ons) or $66 annually.
Prime members can also access Amazon Pharmacy and RxPass benefits, where they get qualifying medications for a $5 monthly fee.
Buy with Prime
In 2022, Amazon expanded Prime’s benefits for a wider range of purchases through a program called “Buy with Prime” that enables U.S.-based members to shop online stores directly on its third-party marketplace. Prime members obtain the same benefits they get when directly shopping the Amazon site, such as fast, free delivery; seamless checkout; and free returns on eligible orders. For the 2023 holidays, Amazon added new Buy with Prime benefits, including order tracking via the website and app, 24/7 live chat customer service on Buy with Prime orders, and more drop-off locations for Buy with Prime returns, with no shipping box or label required.
Buy with Prime initially was available by invitation only for third-party retailers using the Fulfillment by Amazon (FBA) hosted logistics service. Prime members see the Prime logo and delivery guarantee on eligible products in participating retailers’ online stores.
For the program, Amazon charges retailers a service fee, a payment processing fee and fulfillment and storage fees that are calculated per unit. In addition to retailers’ own websites, Buy with Prime can also connect with “most online stores,” including e-commerce platforms like BigCommerce. Merchants sign up by linking their Amazon Seller Central account, and use Amazon’s Multi-Channel Fulfillment to offer one pool of inventory, and can link their Amazon Pay account for checkout. Use of a JavaScript widget enables them to list products on Buy with Prime.
A new Business Prime Shipping program for registered multi-user business customers offers unlimited free two-day shipping on eligible items for all account users.
Overall, Prime members are much heavier online shoppers, averaging 50 more visits to and five more hours spent across all online retailers than non-members. Membership drives loyalty and frequency of visits to Amazon.com.
In 2024, Amazon began extending its Buy with Prime integration for Salesforce Commerce Cloud, which helps retailers using the Salesforce platform integrate Buy with Prime into their e-commerce experience. Initially available by invitation only, the feature will be made available to all U.S.-based Salesforce Commerce Cloud retailers via the Salesforce AppExhcange later in 2024.
In 2019 Amazon also introduced a cross-platform loyalty marketing tool for vendors dubbed Amazon Moments. The solution enables retailers and brands to automatically deliver physical and digital items to customers when they reach preset actions in consumer apps and websites. Marketers can pick a “moment” (such as a customer reaching a certain spending threshold), choose a reward, and inform customers of the action they need to take to earn the reward via a dialog message. When a customer completes the action, they receive a reward URL via digital message or email they can then use to redeem their prize with Amazon, who delivers the reward.
Private Label
Private Label
Amazon is uniquely positioned to develop a strong private label strategy due to its troves of customer behavior data, and for a time was ramping up activity in growing its own brand reach to disrupt an ever-increasing variety of categories. SunTrust Robinson Humphrey estimates Amazon increased its number of private label brands more than nine-fold since early 2016 and is on pace to generate $25 billion in sales by 2022, up from $7.5 billion in 2018.
In 2023, however, the WSJ reported Amazon began paring back the number of private labels it offers. Some are being rebranded under existing brands like Amazon Basics and Amazon Essentials. Others are being cut entirely, particularly several of its clothing brands. In 2019, Amazon had about 45 brands, but in 2023 that number has been more than halved.
Amazon generally relies on steady, organic growth for its private labels and does not advertise its brands in typical fashion, preferring "stealth" launches that let it troubleshoot fulfillment issues and address customer complaints early in the sales cycle, for example. Recently, however, the company has been giving its private label SKUs more exposure across its site, listing them higher in search results under a separate box titled "Top Rated from Our Brands" and promoting them at the bottom of its competitors' product listings. In 2019 the WSJ reported that Amazon even tested a pop-up feature on its mobile app that showed its private-label goods on some of the product pages of rivals, forcing app users to click through to a lower-cost Amazon product or to close the notice before continuing to browse.
Amazon also promotes private label products in other ways. For example, all of its consumable private brands get the "Amazon's Choice" website tag, a designation that in the past would go to top sellers like P&G's Tide detergent. Additionally, Alexa will now suggest Amazon private-label goods if a specific brand preference wasn't previously indicated. Private label product offerings are often tailored to specific platforms.
As Amazon becomes a direct competitor for more sellers, tensions are rising. Critics say Amazon uses its sales data to find fruitful areas where it can produce generic versions of already-popular products, then favors its own brands when customers search for a certain item, suggesting government regulators need to rein in Amazon's dominance over online retail.
Among Amazon's private labels:
- Amazon Basics: The dominant brand, in terms of sales, has moved beyond staple consumer electronics accessories to also include home and office products, bedding, pet products, travel gear and, most recently, foam mattresses. One third of all batteries sold online are from Amazon Basics.
- Solimo: Household basics including coffee and, most recently, energy drinks.
- Wag: A pet brand of dog foods, treats and supplements that launched in 2018 with dry dog food as its first product type.
- Wickedly Prime: A premium snack line that launched in 2016.
- Happy Belly: Amazon's first food private label, launched in 2016 for small-batch, organic and fair trade coffee. The brand has since expanded to numerous food and beverage categories. Brand messaging does not openly state its Amazon affiliation.
- Mama Bear: Launched as organic baby food (including pouches) and diapers but only the latter remain; brand messaging does not openly state its Amazon affiliation.
- Presto!: Launched with laundry and dish cleaners boasting 96% USDA Certified Biobased ingredients free of dyes and synthetic fragrances, and not tested on animals; later added hand soap, all-purpose cleaner, paper towels and toilet paper.
- Amazon Elements: Positioned as a premium line of "everyday essentials," the product assortment currently spans only dietary supplements and baby wipes (though the latter notably dominates more than 15% of the internet wipe market).
- Amazon Essentials: A basic apparel brand.
- Lark & Ro: A high-end women's apparel brand.
- Franklin Tailored: Men's apparel and accessories.
- Society New York: Women's apparel.
- Moon and Back by Hanna Andersson Store: Clothing and blankets for newborns and toddlers made out of 100% organic GOTS and OEKO-TEX certified cotton.
- Cable Stitch: Women's sweaters.
- Rivet: Furniture. (It was once sued by Williams-Sonoma.)
- Stone & Beam: Furniture
Amazon Fresh also offers a phalanx of own brands available in-store and online:
- Fresh: Fresh meat, bakery and produce items. In 2022, Amazon expanded its Fresh food brand to offer a new Fresh Plant-based product line, including a selection of 15 plant-based products, such as patties, Italian meatballs, Chick’n Nuggets and almond milks, and plans to continue expanding the line.
- Cursive: A global wine collection.
- 365 by Whole Foods Market: Natural, organic and clean label offerings.
- Aplenty: Snacks, cookies, crackers, frozen meals, sides and seasonings. For the 2022 holidays, Amazon added more than 100 new, mostly seasonal products to the line.
- Amazon Kitchen: Heat up, spoon in soups; one pan meal kits; salad kits; sides; easy-to-make meal kits; snacks; dressings; and dips and salsas.
- Happy Belly: Fresh, frozen, bottled and bagged grocery staples.
In 2019 Amazon also quietly launched its first private label brand in the business-to-business sector: Amazon Commercial. The initial lineup spanned janitorial and sanitation products, including extra-large rolls of toilet paper and large stacks of paper towels, and now also includes office chairs, microwaves, and other office electronics and equipment.
The company additionally manufacturers and sells its own electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, Alexa and Echo. It had entered the smartphone market with the release of the Fire Phone in 2014, but discontinued it the following year due to poor sales.
Amazon also has been shifting attention to exclusive brands that are owned and produced by manufacturers specifically for the retailer. These companies benefit from the high visibility that comes from being an “Amazon brand." Owned and manufactured by Perrigo, over-the-counter medicine line Basic Care, for example, is Amazon's exclusive alternative to Perrigo's own Good Sense brand. Launched in 2017, the line includes 60 items for allergies, colds and digestion as well as pain relief, antacids and hair regrowth treatment.
Cause/Community Programs
Cause/Community Programs
- Bezos Day One Fund: Launched in 2018 with a $2 billion pledge, the fund comprises the Families Fund and the Academics Fund. The Day 1 Families Fund issues annual leadership awards to organizations and civic groups working to provide shelter and hunger support to address the immediate needs of young families. The vision statement comes from Amazon's Mary’s Place in Seattle: no child sleeps outside. The Day 1 Academies Fund operates a network of full-scholarship Montessori-inspired preschools in underserved communities.
- Amazon Future Engineer: A childhood-to-career program aimed at increasing access to computer science education for children and young adults from under-served and underrepresented communities. Funding from Amazon supports more than 1,000 elementary schools and more than 4,000 middle and high schools with computer science courses, online support, and teacher professional development. Amazon Future Engineer also launched the Amazon Cyber Robotics Challenge — a free, virtual coding competition that teaches students the basics of computer science in the context of a real-life industry challenge — donated more than 13,000 laptops to students in need, and launched free, virtual computer science resources for thousands of students.
- Career Choice: In 2022, Amazon expanded the program to fully cover tuition and fees up to a yearly maximum for GED, English language skills and Bachelor’s degrees with no lifetime maximums. Amazon works with local colleges to offer courses at fulfillment centers that have dedicated on-site classrooms.
- SNAP: Amazon implemented the online Supplemental Nutrition Assistance Program (SNAP) that has given residents who rely on SNAP benefits the ability to shop online for their groceries.
- Prime Access: A discounted Prime membership for those who are on government assistance programs.
- Good360: Amazon launched a donation program that allows U.S. sellers to donate excess and returned goods automatically to a network of 100,000 local charities through a partnership with nonprofit network Good360, which coordinates with local charities for direct pickups at more than 230 Amazon facilities.
Feeding America
Amazon Fresh has been a supporter of Feeding America since 2020. During the 2023 holiday season, the grocer matched customer donations to Feeding America, up to $250,000.
Sustainability
Amazon’s sustainability efforts are built around the Climate Pledge. Co-founded by Amazon in 2019, the pledge is a commitment to meet the Paris Agreement ten years early and reach net zero carbon status by 2040. Amazon has bought the naming rights to a sports stadium in its hometown and dubbed it Climate Pledge Arena.
Still, Amazon's carbon footprint grew for the third consecutive year in 2020. The retail giant attributed the 19% increase to a surge in online orders and deliveries during the stay-at-home period of the pandemic.
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Amazon Trade-In
Amazon has a trade-in program where customers can send eligible devices for the retailer to refurbish and resell,or to recycle. Customers who trade in qualifying items receive a digital gift card, and if an item is no longer in good enough shape to resell, Amazon helps owners send it to an approved recycler. In some cases customers may receive a promotional discount for sending electronics to recycle.
Advertising Strategy
Advertising Strategy
Amazon outspends competitors on paid media overall, and spends more on mobile ads than Walmart and Target combined.
In 2022, Amazon began to focus more on local ads in an effort to compete with Google and its “near me” approach. The move to focus more on local suggests Amazon wants to expand its small and medium-sized ad business to local merchants that serve specific geographic areas. Amazon is forming local ads teams that will build relationships with local media companies and agencies.
Amazon's 2022 back-to-school campaign focused on spending less by shopping its deals. Actor Randall Park starred in 6-, 15- and 30-second spots for 2023's campaign, which reprised the previous year's focus on savings.
In 2022 Amazon began to more heavily promote its Amazon Business platform, encouraging companies to consolidate their supply purchases. The retailer aired TV spots and placed advertisements in airports in key cities to catch the attention of business travelers.
Edge By Ascential’s annual 2022 United States Retail Landscape and Go-to-Market Planning Report predicts that online will account for more than 30% of the U.S. chain retail sales by 2026, and that Amazon will take 14.9% U.S. retail market share by that year.
Solution Providers
Solution Providers
- Media: IPG Mediabrand' Initiative, New York
- U.S. digital buying: Wavemaker, New York
- Outdoor media: Outfront Media, New York
- Out-of-Home media: Rapport US, New York
- Advertising and marketing: Traction 3D,
- Road technology management: Avantor LLC, Seattle
- Mobile vehicle billboards: Movia, Toronto
Clavis Insight also offers OneView for Amazon, an e-commerce intelligence solution providing daily performance insights for brands.
Sponsorships
Sponsorships
Amazon isn't a huge sports sponsor but does play in the space. In past years, the company had a multi-year corporate partnership with the National Collegiate Athletic Association to run ads during the tournament. The tournament's NCAA March Madness Live application was available on Amazon's Alexa devices for the first time in 2017.
In its first Prime Now deal with a National Football League team, Amazon in 2016 partnered with the San Francisco 49ers to equip their already high-tech home stadium to offer tailgaters one-hour Prime Now delivery. In 2017, Amazon began livestreaming Thursday night NFL games free for Prime members.
In September 2022, the retailer will launch Thursday Night Football, the NFL’s first weekly, prime time, streaming-only broadcast, airing exclusively on Prime Video. The agreement with the NFL is for 11 years, and Amazon says it will work relentlessly during the next several years to reinvent the NFL viewing experience for football fans.
Marketing Expenditures
Marketing Expenditures
Marketing expenses were $44.4 billion in 2023, $42.2 billion in 2022, $32.6 billion in 2021, $22.0 billion in 2020, $18.9 billion in 2019, $13.8 billion in 2018 and $10.1 billion in 2017. They primarily consist of targeted online advertising including sponsored search and social activity, television advertising, public relations expenditures, related payroll expenses, commissions to participants in its referral program, and co-op ads.
Advertising and other promotional costs were $20.3 billion in 2023, $20.6 billion in 2022, $16.9 billion in 2021, $10.9 billion in 2020, $11.0 billion in 2019 and $8.2 billion in 2018. While Amazon ultimately trimmed its advertising budget during the COVID-19 pandemic, Amazon's ad and promotion spending in the first nine months of 2020 rose 15%, according to Ad Age. The increase was primarily due to higher payroll expenses and partially offset by lower spending on marketing channels as a result of the pandemic, Amazon said in a filing. Prior to 2020, Amazon has increased ad and promotion spending every year except for 2001, 2002 and 2003, according to Ad Age.
In the U.S., the company’s estimated ad and promotion spending surged 37% to $6.9 billion in 2019, according to Ad Age Datacenter’s analysis. It marked the biggest spending boost among all companies and moved Amazon to the top spot for the first time in Ad Age’s annual ranking of U.S. advertisers.
Metaverse
Metaverse
Amazon is testing and learning with various AR/VR experiments, and making forays into the metaverse, including:
Prime Video Immersive Experience
Amazon unveiled a virtual experience that lets fans of its Prime Video series and films shop for merchandise.
"The Boys" spinoff "Gen V" helped kick off the launch. Fans could visit the series' detail page and take a Virtual Campus Tour to explore the show's fictional Godolkin University and its Virtual Campus Store laden with Easter eggs and official merchandise. Purchases can be made through the virtual experience or via Amazon.com.
AR View
Amazon offers the tool via its mobile application, currently only supported on iOS By tapping the camera icon in the search bar, people can scan barcodes, snap a picture, or upload a photo to launch an image search.
People can also use photos or screenshots of a product to search for products. Furnishings and home decor items include a 3D view and a “View in Your Room” option. The latter lets the user map their space with their camera and “place” the item.
Showroom
Amazon also has a virtual showroom, where shoppers can select different types of rooms and switch paint colors, furnishings and accessories to visualize how elements might fit together.
Virtual Try-On for Shoes
This feature allows customers to use their mobile phone’s camera to “try on” a pair of shoes and view them from several angles.
Amazon NFT Marketplace
The retailer is reportedly launching its own non-fungible token (NFT) marketplace in April 2023, offering 15 NFT collections which first will be made available to U.S. customers. Shoppers will be able to purchase digital merchandise through their Amazon accounts, eliminating the need to buy cryptocurrencies. Some items are likely to be linked to “real-world” counterparts.
![Amazon logo](https://assets1.p2pi.com/s3fs-public/styles/hero/s3/2022-07/amazonlogo.png)
Amazon Promotional Calendar
A roundup of seasonal promotions.
January
- New Year: Seasonal storefront focuses on healthy living while showcasing celebrity-curated collections. GNC is a regular featured brand, while others including Perrier have supplied their own seasonal showcases. Self-help books also get a spotlight.
- CES: Dedicated storefront spotlighted devices featured at the show in recent years.
February
- Super Bowl: Annual Super Bowl TV spot unites celebrities to promote digital assistant Alexa. Amazon Fresh stores accept signage from NFL sponsors such as PepsiCo.
- Valentine's Day: Social media updates link to a seasonal storefront and Amazon Live stream. Room remains for creative brand activations such as Coca-Cola’s sampling of Coke Energy via Alexa in 2022. In 2024, it introduced a "Get It by Tomorrow" feature on its Valentine's Day hub, enabling shoppers to order a gift and receive it by Feb. 14.
- Galentine’s Day: Spinoff holiday gets its own storefront. Social media updates plug items, such as fruit and wine, to celebrate the day.
- Black History Month: Social media updates recognize the month, plugging Amazon’s Black Business Accelerator program.
- Baby Sale: Savings on diapers, toys and strollers — including from brands such as Kimberly-Clark's Huggies and Procter & Gamble's Pampers.
- Presidents Day Sale: Deals on products across many categories.
March
- Women's History Month: A storefront for women-owned small businesses that in 2022 included support from a YouTube conversation series with female entrepreneurs and an Amazon Live stream spotlighting Black women-owned businesses.
- Spring: Social media updates with greenery ideas from Amazon Home.
- Pi Day: Social media updates plug pie possibilities through Amazon Fresh.
- St. Patrick’s Day: Social media updates share links to green outfits.
- Big Spring Sale: New for 2024, six days of savings across several categories, including beauty, electronics, groceries, apparel, jewelry, home and garden, toys and games, and more.
April
- World Book Day: A spotlight on books from around the globe.
- Earth Day: In previous years an occasion for brand partnerships, Amazon refocused the spotlight on its own sustainability efforts with a dedicated webpage in 2022. Social media updates suggest asking Alexa to “grow a tree” to initiate a $1 donation to One Tree Planted.
- Easter: A seasonal storefront gives the stage to relevant items across a wide range of categories. Social media updates link to “a basket full of goodies” within Amazon.com
- Mother's Day: A seasonal storefront offers gift ideas.
May
- May the 4th: Facebook update linking to Star Wars-related merchandise.
- National Pet Month: A relatively major monthlong event spanning discounts and a new promotional feature every year. After an inaugural 24-hour Amazon Pet Day sales event in 2022, the retailer expanded it to two days.
- Amazon Book Sale: New for 2024, the e-tailer kicks off the summer reading season with a six-day shopping event that features deals on thousands of books across several genres.
- Summer Beauty Haul: Weeklong event features a promotional credit for $10 when shoppers spend $50 or more on beauty products shipped and sold by Amazon. The week features deals on assorted Lancome, First Aid Beauty, Laura Geller New York and other brand's products.
- Home Improvement Month: Social media updates with links to the home improvement category of products.
- Memorial Day: Social media posts express gratitude for service. In 2024, the e-tailer offered a week of savings through Memorial Day, with savings across several categories, including mattresses, electronics, outdoor and garden, appliance and kitchen, and fashion. Brands represented include Amazon's private labels as well as GE, Ray-Ban, Bissell, Nespresso, Traeger and Samsung.
- Father's Day: A seasonal storefront offers gift ideas. A spotlight on giftables includes shopping lists curated by celebrities.
- Gaming Week: Promotions and sales across all things connected to video games.
- Mother's Day
June
- Back to College: Hosts its own seasonal storefront as well as those from relevant manufacturers.
- Summer: At Amazon Fresh stores, summer-time snacks and beverages, from brands including private label Aplenty and Coca-Cola’s Smart Water, as well as bev alc brands like Modelo get the spotlight through signs and displays. Social media updates promote Amazon Fashion for summer styles.
- Pride Month: Amazon Fresh stores deployed themed endcaps merchandising bev alc SKUs in 2022.
- Father's Day
July
- Prime Day: An annual event during which Amazon slashes prices on a wide — sometimes comical — assortment of items for Prime members. What began as a 24-hour event in 2015 grew to a two-day event spanning 23 countries in 2024 (with India's Prime Day planned later in the summer). In 2024 A plethora of social media updates and off platform digital activity supports, including early deals and influencer activity.
- Summer: Offers seasonal incentives from manufacturers that have included Edgewell Personal care.
- Back to School: Amazon's Happy School Year storefront offers related items targeted toward parents and teachers; manufacturers of snacks and other relevant products supply their own seasonal storefronts. Social media updates support.
- National Ice Cream Month: Social media updates promote favorite flavors at Amazon Fresh.
August
- Back to School
- Summer
September
- Halloween: At Amazon Fresh stores, endcaps outfitted with themed headers merchandise confectionery from various brands.
- Fall: Amazon Fresh endcap outfitted with themed header stocks seasonal SKUS including Starbucks fall blend coffee and private label Aplenty brand apple juice.
October
- Prime Early Access Sale: A second two-day Prime Day event introduced for the first time in 2022 provides an early start to holiday activities. For 2023, Amazon announced Prime Big Deal Days, with 19 countries participating.
- Halloween: Own seasonal storefront leaves room for individual ones from confectionery manufacturers, most recently Hershey Co. Social media updates link to confectionery deals.
- Adopt a Shelter Dog Month: A year-round storefront spotlighting various shelters with sponsorship from a plethora of pet brands including Purina and Hill’s gets amplified during the month. Activity sometimes includes pop-up adoption events that likewise boast brand sponsors.
November
- Black Friday: Seasonal hub suggests gifts by recipient with discounts across categories and surprise limited-time deals that rotate frequently. As is typical for Amazon, many of the best deals come on its own products. Social media updates tout offers.
- Cyber Monday: Amazon's top sales day for several years. Social media updates notably include discounts for Cyber “Meowday.”
- World AIDS Day: Ahead of the Dec. 1 observance, stages the (RED) Shopathon showcasing products whose purchases raise money to fight AIDS.
December
- Holiday: Activity continues. Digital Day post-Christmas promotion spotlights the entertainment category. Amazon Fresh stores debut themed endcaps merchandising seasonal and bev alc SKUs.