January 9, 2022


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)

Signs of slowing are everywhere.

Amazon’s slowing revenue growth isn’t a company-specific issue. The broader economy has slowed as the consumer reacts to decades-high inflation, along with a reversion to spending on experiences and services following the pandemic.


Yet, Amazon’s deceleration is notable given its history of rapid growth.


Since 2017, Amazon has compounded gross merchandise volume (GMV) flowing through its platform at 21% each year, going from $250B to $640B.


Compare this to investor forecasts for GMV growth of 7% in 2023, and it’s clear why retail leaders hungry for growth have become more nervous.


Feeding this anxiety are near daily headlines on Amazon slowing.


Investors have also cut their outlooks, which is one of the best quantitative ways to illustrate worsening expectations of future growth. In analyzing Amazon 1P, 3P and Advertising business segment projections, 2023 estimates are now 16-19% lower than what we expected this time a year ago.



1P consumer brands might also be experiencing this in real time. Several agencies and consumer brands, unprompted, have highlighted purchase order reductions as the primary issue confronting their Amazon business.


This was category agnostic too. Discretionary categories have experienced this for several quarters now, but even FMCG ordering and inventory are on the decline at Amazon, according to our recent research.


Brands are trying to determine if this new level of POs will be structurally lower or just temporary. Our sense is that Amazon is attempting to run leaner inventory levels as its focus has shifted to profitability. However, there will likely be a period where Amazon is learning how to balance new profit goals with maintaining in-stocks. Brands can therefore expect more volatility in the quarters ahead as this learning process unfolds.

How did 4Q22 trend for Amazon?

Amazon is set to report results in a few weeks, providing crystal clarity to how it performed during the holiday quarter.


In the meantime, we benchmarked 51 consumer brands, aggregators, accelerators, and agencies to see how the quarter performed versus their expectations.


The results are slightly negative.


A net 4.5% of consumer brands report their sales results were worse than expected.



Investors are noticing this. In the last three months, they have cut their outlook across Amazon’s business segments for the fourth quarter.

  • 1P sales forecast cut by 8%
  • 3P sales forecast cut by 6%
  • Ad sales forecast cut by 4%


That translates to a GMV reduction of ~$14B in 4Q.


As Bezos suggested in October, “…batten down the hatches”.


Based on estimates today, Amazon’s fourth quarter is likely to see the lowest Q/Q growth in its history, despite it holding the PEAS event in October.


We can’t do anything about 4Q at this point. But combining these datapoints means brands that got through with decent results this past quarter should be applauding the outcome.

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