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12 September 2022
Slowing growth spells bleak midwinter on Amazon
E-commerce & mobile retailOnline retail
As inflation hits consumer spending around the world, some merchants expect this coming holiday season – usually a fruitful and busy one – to be difficult as online sales growth rates are expected to drop into single digits, with Amazon growing slightly slower than the overall sector.
Why it matters
Online shopping is now incredibly important, and while it is expected to continue growing, as the engine behind most retail sales growth, these new projections are worrying for retailers that will now have to deploy the opposite set of tactics from the pandemic as they seek to offload inventory. Effectively, the need to do offers and deals could be a big commercial problem around the corner.
Figures reported by Bloomberg expect US e-commerce sales to reach a trillion dollars, but at a 9.4% year-on-year growth rate, which means a slip down from continued double-digit growth.
Sellers big and small are going to need to sell as fast as possible, taking advantage of shopping festivals, offering discounts, and spending heavily to get you brand in front of people. Many sellers report slowing spend on everything but the bare necessities.
While Amazon’s business remains solid, with a wide array of revenue streams, the crux of the story is about the impact that an inability to shift inventory will have on the many small sellers who use Amazon’s warehouses for a small fee. Should the struggle to shift continue, their fees will increase: short-term gain for the giant, but a longer-term worry as the competitive market on the site begins to struggle.