ClickZ Amazon Insights Newsletter - 09.19.2024

PLUS: Surviving Amazon's Vendor Termination – Transitioning to 3P

Author

ClickZ
September 19, 2024 • Estimated Reading Time: 7 minutes

Specialty Bites 🍪

Is Amazon eyeing TikTok? Speculation is brewing as reports suggest that Amazon might be exploring a closer relationship with the social media giant. Amid the U.S. government's ongoing scrutiny of TikTok, owned by ByteDance, rumors of a potential acquisition are circulating. Former TikTok sales head Roee Zelcer even hinted, 'The writing is on the wall.' Whether or not Amazon pursues an acquisition, their growing partnership could complicate the U.S. government's plans to ban the app.

So, what’s happening? TikTok recently introduced a feature allowing users to shop Amazon products directly within the app. Amazon, ever opportunistic, is encouraging its influencers to promote these products on TikTok. This evolving partnership could be a game-changer for Amazon, positioning it to dominate social media-driven e-commerce. The combination of TikTok’s vast user base with Amazon’s e-commerce power could create a formidable synergy.

Why is this important? If Amazon were to acquire TikTok, it could significantly reshape the landscape of social media and e-commerce. TikTok would gain stability amidst its legal challenges, and Amazon would add a valuable new asset to its portfolio. However, only time will reveal how this potential acquisition plays out. Stay tuned.

Doug Herrington, CEO of Worldwide Amazon Stores, reflects on his 19-year journey at Amazon, emphasising the importance of innovation, learning from failures, and leadership principles. He highlights Amazon's advancements in delivery speed, cost efficiency, and employee safety, while maintaining a passion for building and servant leadership.

Amazon's termination of 1P vendor accounts affects brands with annual sales below $5-10 million. Transitioning to Seller Central is essential for continued access to Amazon's customer base, greater control, and higher profits. Brands should act swiftly, either independently or with agencies like Envision Horizons, to ensure a smooth transition.

Amazon has invested $12.3 billion in its Delivery Service Partner (DSP) program over six years, empowering small business owners and creating 390,000 jobs. The latest $2.1 billion investment focuses on safety, pay increases, and technological improvements, ensuring reliable deliveries and community impact.

Meta is hiring an Amazon ad specialist, signalling intensified competition among social media platforms to attract Amazon's substantial marketing budget. This move highlights the growing rivalry in social commerce as platforms enhance services to capture more ad dollars from the e-commerce giant.

Clinique successfully launched on Amazon without cannibalising sales from other retail partners by differentiating product offerings and maintaining strong relationships with retailers like Ulta. Exclusive products and strategic partnerships helped mitigate concerns, allowing Clinique to expand its presence while keeping existing retail channels satisfied.

Performance Platters 🍽️

Fospha's latest report, "The State of E-Commerce H2 2024", reveals crucial trends that will shape your marketing strategy. What's inside:

📱 How the major platforms' KPIs have trended in 2024, and where you should be investing. 

🚀 How to access Paid Social's huge scaling potential. 

✨ The most effective Google channel of 2024.

🎯 Full-funnel strategies for Meta, TikTok and Snapchat

Let's break down the platform-specific insights: 

  • TikTok: Emerging as a powerhouse for efficient new customer acquisition 

  • Meta: Maintaining strong performance with competitive CAC 

  • Snapchat: Experiencing rapid growth, particularly effective during peak shopping periods 

These findings underscore how impactful platforms like Meta, TikTok and Snapchat continue to be for driving sales - yet how underinvested they remain. It's incredible to see that brands can triple spend in Paid Social before becoming unprofitable. Success now lies in diversifying across the entire funnel, understanding the nuances of each platform, and continuously optimizing to unlock more scaling potential.

Jamie Bolton, VP Growth at Fospha

WPP and Coca-Cola topped the 2024 Cannes Lions creative charts, with Coca-Cola winning 17 awards. WPP was named Creative Company of the Year. Heineken and Apple followed in the rankings. The United States was the most creative country. The LIONS Creativity Report highlights impactful creativity driving growth.

Shopify partners with Roblox to integrate in-game shopping, allowing brands to sell physical items directly within the game. This collaboration targets Roblox's 80 million daily users, with a full launch in 2025. Shopify's president highlights the endless possibilities, emphasizing the future of immersive commerce in the digital world.

Ad spend in 2024 is set to rise, driven by retail media, value-based messaging, political ads, and CTV monetization. The IAB projects an 11.8% increase, with retail media leading due to high CPG and beauty spend. AI in search could further boost Q4 advertising.

ClickZ is a Contentive publication in the DTC Ecommerce division