3 minute read

Tech has been a bloodbath of late and Amazon continued the trend, reporting weaker than expected results and a mediocre growth outlook.

However, the company pulled out the slowing-growth playbook and announced it will be raising the price of Prime Membership 17%, to $139 per year (currently $119/year).

The combination of this price increase, along with an accelerating cloud business is helping drive shares higher after hours.

Summary: Amazon's Dec-21 results showed digital commerce growth is slowing across the board following the CV-19 boost in 2020. Continued leadership in retail media and its big investments into fulfillment position Amazon for retail share gains this year.  

Implications for Broader Retail

  • Amazon appeared to be a share gainer to share neutral during the quarter, suggesting its rivals will see similar decelerating growth trends in their digital businesses.
  • Amazon's ad performance suggests the digital ad market as a whole is healthy, although slowing. 
  • Amazon appears well-positioned from a fulfillment center perspective, creating a more challenging competitor for its omnichannel peers. Amazon is expected to expand the number of markets it can deliver same day or faster and ensure it is meeting its one-day delivery promise.

The full version of this article is only available to Stratably+ subscribers. Click here to subscribe today and gain access to this premium content.