Top 4 Global Ecommerce Articles for the Week of July 18

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For those who are new here, every week(ish) I'll share various topics that I think are important for the modern leader in Ecommerce.

Every Monday, I'll try to share the articles that stood out to me that are worth a few minutes of your time to read.

Article 1: Amazon says members bought 300 million items on Prime Day

Amazon powered ahead on Prime Day last week with about 20% more items sold than on Prime Day 2021. Given that Amazon’s ecommerce sales growth has slowed significantly since the start of the pandemic, this was a welcome win needed to help prevent more chaos for the stock on Wall Street. Plenty of other retailers competed throughout this period, aiming to get a piece of the pie, but Amazon’s dominance remains unparalleled in the US in terms of shopper traffic and reach. As rumors abound regarding a ‘second’ Prime Day later this fall, Amazon could be experimenting with smaller periods of always-on visibility and optimization rather than relying on exceptionally large tentpole events.

For brands, Prime Day isn’t about discounts, it’s about ad spend and product visibility. If a shopper can see your item, they will buy it if it is relevant. That’s why, according to data from CommerceIQ customers on Amazon, 1P Amazon vendor ad spend surged 4x its normal volume for Prime Day last year, leading to a 2.5x ordered product sales lift. Did Amazon beat that number this year? Keep an eye out on our blog here where we will dig into more detailed Prime Day numbers when our data on CommerceIQ customers on Amazon becomes available next week.

Article 2: Instacart shakes up its leadership structure as the market awaits its IPO

Instacart is lining up its C-suite with multiple promotions as it prepares for its IPO after filing privately. The company now has a new CMO, CTO, Chief Product Officer, Chief Business Officer, and Chief Architect. For the most part, Instacart is promoting internally with employees with years of hands-on experience at the company. Instacart is likely happy with its current direction and sees its IPO and path forward thereafter as a matter of refining and expanding tactics rather than as a pivot away from its current strategies. I tend to agree. The current slump affecting most of ecommerce is only temporary.

Instacart is also combining its ad business with its core grocery business under its new Chief Business Officer, Chris Rogers. Instacart may have the third or fourth-most sophisticated retail media business in the industry after Amazon, Walmart, and Target and is uniquely suited to an online grocery buying experience that, in many ways mirrors the physical store shopping trip. Ad spend is only going to rise at Instacart and brands need to optimize their ad strategy not only for ROAS but for driving incremental sales.

Article 3: Robots aren’t done reshaping warehouses

While autonomous robots are a common sight at Amazon and Walmart fulfillment and distribution centers, robotics will soon be prevalent across logistics in retail as other players join the trend. The automation industry saw a rise of 28% in purchasing in 2021 compared to the prior year. The growth over the next five years will be significant as the case for the fully automated warehouse is improving. Those who don’t adapt risk falling behind.

Retailers need to evaluate the time horizon in which they will recoup costs when investing in robotics. Warehousing and fulfillment centers are increasingly capital intensive as automation becomes more widespread. Employees are paid as they go but robots are typically goods purchased all at once minus servicing arrangements. I do wonder if this is another roadblock that prevents smaller players from competing with their powerhouse rivals. Rather than owning, smaller retailers (and brands) could decide to lease robotics as long as the ROI is plainly proven.

Article 4: Mukesh Ambani, Jeff Bezos to bid for German retailer Metro AG’s India operations

The possibility of Amazon acquiring Metro in India is an interesting chain of thought since the wholesaler’s footprint could act as a distribution hub for ecommerce operations. Why should Amazon build out warehouse space when it can be acquired from readily convertible and standardized buildings ideal for that purpose? The real question would be if Amazon would use Metro to build a physical retail presence in the country.