What will Amazon do in 2021?
With Amazon expanding its share of the e-commerce market in unprecedented times this year, their moves to attempt to continue that trend in 2021 will be fascinating.
This week leading business finances website Forbes published six predictions for Amazon next year in an article you can read in full here.
Here Thompson and Holt managing partner Craig Gedey looks at each prediction and offers his own take on how the online giant will push on in 2021.
1. Amazon’s Fulfilment capabilities will become their next Amazon Webservices
What Forbes said: Amazon will further invest in their fulfilment schemes, “ultimately offering excess fulfilment capacity to other retailers and businesses who need a reliable alternative to the major carriers”.
Thompson and Holt’s Craig Gedey: “This makes complete sense. As Amazon’s infrastructure grows and grows, its capabilities to expand programmes already put in place will increase significantly. We’ve also seen them place restrictions on the Seller Fulfilled Prime programme, suggesting a move away from that and into taking more responsibility themselves. It’s certainly one to watch.”
2. More experiments with live video and virtual experiences
What Forbes said: Following in the footsteps of China, where livestream shopping accounts for around 9percent of its ecommerce, Amazon will move further into that market with more live shopping experiences.
Thompson and Holt’s Craig Gedey: “Again, this seems to be the logical step in this field. The launch of Amazon’s ‘Experiences’ platform in September this year, offering virtual classes and sightseeing tours, was a move in this direction. We definitely expect to see more innovation on this front in 2021.”
3. Amazon will slow down or even stop its private label brand expansion
What Forbes said: “Amazon's array of private label brands came under a lot of fire during Congress' investigations into anti-trust this year. It is an ongoing concern for Amazon sellers and vendors that their products are being either 'ripped off' directly or that Amazon is using sales data and supply chain data to create competing products. Amazon will put this strategy on the back-burner and focus on other ways of retaining customers.”
Thompson and Holt’s Craig Gedey: “This is a prediction we’re less sure of. It’s true that the private label brands have been an issue in investigations, and a concern for other Sellers. But we don’t believe that Amazon will just give up on something they have clearly invested heavily in so easily. It might be that they tweak their approach on certain fronts however.”
4. More competition amongst sellers
What Forbes said: Competition will be cranked up via the trend of large companies buying up successful smaller ones on Amazon, improving advertising and sales. Another factor is Chinese manufacturers selling directly on Amazon.
Thompson and Holt’s Craig Gedey: “There’s no doubt that competition will continue to rise on Amazon, with the two examples quoted part of that process. The state of high streets around the world and a move towards online shopping generally will only add to those trends. Operating effectively will never be more important for Sellers.”
5. Bulking up Amazon Fresh
What Forbes said: Amazon will look to reverse 2020 moves that saw Instacart and Walmart accelerate the online grocery market quicker than they did. Part of that will be bringing together Amazon.com, Amazon Fresh, and Prime Now for an easier customer experience.
Thompson and Holt’s Craig Gedey: “This could vary from country to country. Amazon Fresh is already live in America and the UK, with Canada next in line. How it fares in those places - amid considerable competition - will decide the size of expansion. But it is a natural area for Amazon to target.”
6. Amazon Advertising will accelerate
What Forbes said: “Amazon is the third largest advertising platform, after Facebook and Google. In 2021, Amazon’s lucrative advertising business will continue to grow at a rapid clip by offering more ‘above the line’ media opportunities to brands.”
Thompson and Holt’s Craig Gedey: “This is something we definitely expect to happen. As technology improves, online ads can become more and more targeted and it would be a natural progression for Amazon to offer more ‘above the line’ opportunities both to big brands and Sellers. It could also be something that is linked into the expanding Experiences section of the site.”