Topics Covered: January 9, 2023

  1. Diving a layer deeper into Amazon's growth
  2. Feeling behind? 
  3. Top vs. Bottom of Funnel
  4. eGrocery Updates

A Layer Deeper: Analyzing Amazon's projected growth in 4Q & 2023

Amazon has historically been a growth machine, compounding its sales at an astonishing 24% each year over the last decade.


2023 is shaping up to be different.


eCommerce leaders face the prospect of much slower growth in the year ahead driven by a combination of reduced consumer demand across retail, greater competition, and a focus on profitability.


The following essay analyzes the magnitude and implications of this slowdown in three sections, enabling leaders to form a data-driven opinion on Amazon’s growth potential looking forward.

  1. Early read on 4Q22 performance on Amazon
  2. Analyzing Amazon’s 2023 growth outlook (Stratably+ members only)
  3. Amazon’s growth relative to peers (Stratably+ members only)

Continue Reading Here...

For the Nerds

Feeling Behind: So many consumer brands feel behind in their digital operations. But it's not surprising when the pace of change is relentlessly accelerating, particularly with media. Here's a quote that captures the reality we're operating in:


“We live in a time when more interesting ideas, concepts, people, and places can fly by in the space of one 30 minute TikTok binge than our ancestors experienced in the entirety of their localized illiterate lives.”


- Thomas Flight via Rex Woodbury's Digital Native Newsletter (Digital Native

Top vs. Bottom of Funnel: Denny offers a non-consensus take on the importance of returning to "old fashioned, mid and upper funnel brand building strategies".


Marketers are cutting upper funnel ad spend amidst a touch macro backdrop. They're also concerned about the ongoing trend of rising CPC prices on retail media, where spend is proving more resilient so far.


The problem is that what's getting cut helps combat the CPC concern long term. If you want to combat CPC inflation, one of the most durable ways to do that is by shaping consumer search behavior.


Get them to search a branded term rather than a generic term and you've won.


Denny also rightly points out the value in AMC to help validate this strategy. (DSI)

eGrocery news: And lots of it...

  • Instacart cut valuation further: This cut puts it more in line with share price performance of peers like DoorDash. Thus, rather than a signal of its business deteriorating further since October (the last valuation cut), this appears more of a reaction to markets not rebounding.
  • Flink (Qcommerce) might turn a profit: It's incredibly difficult to deliver grocery items in 15 minutes AND make money, but Flink management says its on pace to do that. This follows Gopuff's recent commentary on having a path to profitability, both of which are positive signs some will make it through the quick commerce turbulence
  • DoorDash expanding services: Many brands are questioning the viability of Instacart and omni-enablers business models, but DoorDash's latest return pick-up offering demonstrates the flexibility, and money-making opportunities these businesses have at their disposal.
  • Boxed looking for capital: Boxed is looking to raise money while evaluating partnerships/selling the business. Investor friends believe we're going to see many more instances of digital-oriented businesses needing to do something (i.e., raise at a lower valuation or sell), particularly beginning in mid-23. This will create unique corporate development opportunities for omni-channel incumbents.