ClickZ Amazon Insights Newsletter - 11.14.2024

PLUS: Amazon targets $8B in AI with second Anthropic investment

Author

Priscilla Soedarpo
November 14, 2024 • Estimated Reading Time: 6 minutes

Niche Nuggets 🔎

Amazon Prime Day has become a pivotal event in the online shopping landscape, drawing significant attention from consumers and competitors alike. In 2024, over a third of U.S. online shoppers participated in Amazon's Prime Day, underscoring its influence. However, a notable portion of shoppers remained disengaged, highlighting Amazon's challenge in fully capturing the market. The event, held on July 16-17, was strategically positioned between other Amazon sales, enhancing its appeal.

Despite the buzz, only 2.42% of respondents joined Amazon Prime to capitalize on the deals, with most already being members. Interestingly, 63.13% of consumers refrained from making purchases on Amazon during Prime Day, indicating a potential saturation or shift in consumer priorities. Apparel and accessories emerged as the top categories, while spending was generally conservative, with 81.1% capping their expenditure at $250.

The data reveals that while Amazon remains a dominant force, competitors like Walmart and Target also benefited, albeit to a lesser extent. This dynamic suggests a complex interplay of loyalty and exploration among consumers. As the holiday season approaches, two-thirds of respondents plan to maintain their spending levels, reflecting a cautious yet steady consumer outlook. This analysis highlights the evolving nature of consumer behavior and the strategic maneuvers of major retailers in the digital age.

Amazon is considering a second multi-billion dollar investment in AI startup Anthropic, following a $4 billion investment last year. Anthropic, which uses Amazon's cloud services, prefers Nvidia-designed AI chips. Previously, Anthropic secured $500 million from Alphabet, with a promise of an additional $1.5 billion investment.

Tech giants like Shopify, Amazon, and Google are advancing AI in retail. Shopify partners with Coveo for personalized shopping, while Bezos invests in robotic dexterity. Google's camera search revolutionizes shopping, but AI also raises cybersecurity concerns. Social commerce grows, with influencers shaping consumer behavior, as seen with Walmart and Target's strategies.

Amazon is integrating its Whole Foods and Amazon Fresh fulfillment networks to enhance its grocery business. This strategic move aims to offer a seamless shopping experience, competing with Walmart's dominance. By expanding delivery services and introducing new store formats, Amazon seeks to close the gap in consumer grocery spending.

Trump's second term could reshape social media regulations, impacting platforms like Meta, X, TikTok, and LinkedIn. While Meta may face challenges, X could gain influence with Musk's support. TikTok might avoid a ban, and LinkedIn could benefit from AI regulation changes. However, Trump's unpredictability remains a factor.

Leading Voices 📣

Jamie Bolton reveals how top eCommerce brands drive resilient growth:

🌐 Diversification is Key: A diverse channel mix acts as an “insurance policy” for brands amid rising CPAs and a challenging market.

🔄 Stay Agile: What worked last year may not work today. Top brands adjust their strategy over time, adapting to new growth levers as they mature.

📊 Measurement Matters: With channel diversity comes more complex measurement needs. Only with full-funnel attribution can brands assess their channel mix and remain agile.

For a full rundown, check out the full post!

Performance Pulse 📈

Ad prices fell in Q3 2024, impacting ad spend growth in search and social. Retail media saw a click surge, while new formats outpaced traditional channels. Amazon DSP and Google Performance Max showed significant growth. Lower prices increased ad volume, especially in retail media's purchase funnel.

To navigate rising holiday advertising costs, diversify your strategy by incorporating platforms like TikTok, YouTube, and Connected TV. These channels offer competitive pricing and reach new audiences. Focus on user-generated content and platform-specific strategies to optimize engagement and conversions, ensuring a successful holiday marketing campaign.

Front Row, an acceleration company, helps brands optimize e-commerce strategies on platforms like Amazon. By leveraging Deal Days, brands can boost sales and visibility. Success requires planning, unique offerings, and nurturing customer loyalty. Effective SEO and affiliate marketing are crucial for sustained growth and maximizing long-term benefits.

ClickZ is a Contentive publication in the DTC Ecommerce division