Lessons from Amazon
While Amazon strengthened its status as a worldwide hyperscaler in cloud computing, e-commerce sales fell below expectations. Looking at 2022 e-commerce predictions, there are lessons to learn from Amazon’s underperformance. However, that underperformance still rings signification profit. Revenue in the third quarter of 2021 was up 15%, for example. On the other hand revenue for the third quarter in 2020 was up more than 35%. Two factors attribute to the decrease: shoppers eager to get back to traditional brick and mortar stores and the supply chain crisis.
We gave our readers plenty of updates and explanations for the shipping container issues that hurt worldwide commerce in 2021. Of course, post-pandemic consumer behavior will correct and steady leaving the soaring online growth of 2020 as an anomaly. Furthermore, Amazon’s dip is also symptomatic of growth, inflation and increases in labor costs. Perhaps that explains why, last year, Amazon’s services revenue exceeded retail sales for the first time ever. So what’s the lesson from Amazon? Diversify. Web Services, advertising, third-party seller services and Prime subscriptions helped big brother tip the scales.
Water Under the Bridge
While container ships became the worldwide metaphor for the supply chain crisis in 2021, experts may point to improvements in logistics as the long-term solution. Last year, we also gave our blog readers an in-depth overview of 3PL fulfillment services. So looking ahead to 2022 the crystal ball may not focus on the availability of retail goods. As a matter of fact, analyst expect the 2022 online economy to grow at about the same rate, 17%, as 2021. As last year’s sunset is water under the bridge the lessons from Amazon point to diversity as a means to survival, growth and profitability.
E-Commerce in 2022
If 2022 is the year of the post-pandemic economic correction and 2021 looks to set the bar for economic growth, what’s next? In a like manner, look to the models of online retail that are winning. Customer service, consumer behavior and personalization can all be augmented through professional fulfillment services. Expectations on delivery, packaging and returns are at an all-time high. Finding a partner that’s either regional or, ideally, local, can make or break a small business in 2022. As online giants extend their footprint to a global model it will become more difficult to get customer service, advice and support. In our next blog we’ll discuss how you can prepare for 2022 and beyond through digital transformation and diversification. Don’t worry we are here to help, be in touch today with any questions!