Month: April 2019

It’s hard to imagine McDonald’s without its signature yellow and red. The golden arches–in #FFC20F for you RGB nerds–have stood the test of time and are an iconic institution around the world. But what if the brand had a groovy ’70s vibe? It very well could have happened but for a sensible brand manager (likely…

New York Media’s websites, including nymag.com and sister brands The Cut and Vulture, are about to get a visit from Game of Thrones’ ravens. In partnership with HBO, a Game of Thrones takeover will launch Friday on those sites and run through Sunday, when the final season of the hit show premieres. The ravens, created…

Influencers can be problematic. Sure, they have big audiences and know how to rock a plandid on Instagram, but they also have a habit of saying and doing pretty dumb things that give their sponsors constant anxiety. Hey, they’re only human. But what if they weren’t? Virtual influencers are one of the odder ways companies…

In an open letter to Amazon CEO Jeff Bezos and the board of directors, more than 4500 Amazon employees asked the Earth’s most customer-centric company to become more Earth-centric by adopting measures against climate change. Pointing to Amazon’s history of “taking ownership of hard problems,” the employees said in the letter that the platform’s leadership…

Ahead of its IPO, Pinterest is giving advertisers–and Wall Street-yet another reason to come flocking to the platform. Starting today, Pinterest is rolling out “conversion optimization” in four different ad products: promoted pins, promoted videos, carousel and shopping ads. Now, marketers can set specific goals for their campaigns like online checkout or more sign up….

At this week’s annual ANA Media Conference in Orlando, Florida, Marc Pritchard, chief brand officer of Procter and Gamble, called on marketers to embrace a new system when it comes to the media supply chain, in order to fend off the persistent “dark side” that exists within the current ecosystem, he said. “It’s time to…

Jeff Bezos shared his annual letter to shareholders on Thursday, and, as usual, it’s riddled with hints as to where Amazon will be throwing its weight next.

To be clear, that’s massive weight. Bezos tries to play down Amazon’s size and influence in the market, writing that “Amazon today remains a small player in global retail,” and pointing to the fact that Amazon’s market share remains in the single-digits, as roughly 90 percent of retail remains offline. It’s true, but it’s misleading to cast a company that did $232 billion in sales in 2018 as a small player.

Besides downplaying his company’s tremendous size, Bezos laid out details around Amazon’s first-party vs. third-party retail businesses, future plans for Amazon Web Services (itself a $30 billion business), the state of Amazon’s physical retail, and also gave a glimpse into life at Amazon for employees. Here’s the need-to-know cheatsheet.

Numbers to know

Retail:

• 58%: The share of physical gross merchandise sales sold on Amazon by third-party sellers in 2018. This percentage started at 3% in 1999, and it’s climbed steadily ever since.
• $160 billion: Total third-party sales in 2018, an annual growth rate of 52%.
• $117 billion: Total first-party sales in 2018, an annual growth rate of 25%.
• $95 billion: eBay’s 2018 gross merchandise sales, in comparison.

Stores:

• 10: The number of Amazon Go stores.

Alexa:

• 100 million: Alexa-enabled devices that have been purchased to date.
• 150: Alexa-enabled products on the market.
• 80,000: Number of existing Alexa skills.

The rise of third-party sellers
In the letter, Bezos’s first order of business is to highlight third-party sales surpassing first-party sales. He pins the success on seller tools, including inventory management, payment processing, shipment tracking, international shipping and sales reports, as well as Fulfilled by Amazon and Prime membership.

Bezos said this type of investment in third-party seller tools, improving the shopping experience and enabling sellers to compete with Amazon’s owned retail business, is unmatched in retail. And there’s more happening under the surface. Amazon is currently in the process of reworking its retail business across first-party and third-party sellers, with the goal being to shift small to medium sellers off of first-party, focusing that business instead on big-name brands and Amazon’s exclusive and private label brands. The third-party marketplace, in return, will become more autonomous for sellers. It’s a way to both empower them — just this week, Amazon announced it added an improved Brand Analytics program for third-party sellers that included customer demographic data — and free up Amazon’s labors for other endeavors.

“Amazon is moving toward a ‘hands off the wheel’ approach to seller relationships, meaning you’ll see more being done to get third-party sellers operating on their own, as autonomously as possible,” said John Ghiorso, CEO of Orca Pacific.

Leveling up AWS
Bezos also highlighted Amazon Web Services. The cloud-computing arm of Amazon’s business, worth $30 million in revenue, operates specialized databases for client partners as the need to process massive amounts of information has increased. Now, as competitors like Microsoft and Google gun after retail clients for similar businesses, Amazon is adding more capabilities to AWS.

What’s next: Machine learning. Bezos said that Amazon has been working on figuring out a way to help its AWS customers build out machine learning capabilities, leading it to launch SageMaker a year and a half ago. Bezos said its being used now by thousands of AWS customers that are building machine learning models into their businesses. Machine learning — lumped in with AI — has been touted by retailers as the next frontier in the industry; Amazon hitting the gas on this capability for AWS could be a game changer for retailers that have explored alternative partners for their cloud-computing businesses.

Inside Amazon
From what Bezos is willing to share, Amazon is working to improve the skills of its 250,000 employees. He called out two programs, the Career Choice and Career Skills programs, that pay tuition fees and offer classes in skills like resume writing and computer basics.

He also noted that Amazon’s raised the employee minimum wage to $15 and match employee benefits, calling on retail competitors to do the same.

But there’s more beneath the surface beyond the letter. Amazon’s cutthroat delivery schedule, the abysmal and sometimes life-threatening conditions inside Amazon warehouses, and more. And in response to the minimum-wage challenge, Walmart’s head of comms responded on Twitter, telling Amazon that it should pay its taxes. Amazon reportedly paid $0 in taxes on $11 billion in profit in 2018. Shots fired.

The post Cheatsheet: Amazon’s 2018 shareholders letter hints at the company’s priorities appeared first on Digiday.

Like Mary Meeker’s annual internet trends report, Amazon CEO Jeff Bezos’ annual shareholder letter gets the industry all excited. Today, the internet behemoth’s 2018 shareholder letter is out. Last year, Bezos disclosed the number of Prime members for the first time ever. And while there weren’t any comparable bombshells in 2018, it is perhaps notable…

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