ChannelAdvisor Scot Wingo By Scot Wingo

Amazon Q4 Results Preview (From a Seller’s Point of View)

After the market closes on Thursday, January 28, 2016, Amazon will report their Q4 (Holiday) results from 2015.  With the backdrop of retailers like Macy’s and Walmart reporting less than stellar results and closing stores, the NRF saying that holiday came in at 2-3% overall and comScore reporting e-commerce came in at ~14%, it will be interesting to see if Amazon over performed against those benchmarks.

The Amazon Q4 Results Tracker for sellers

Here is a dashboard for the key metrics that we’ll be watching for in the call along with where Wall St. is predicting and also where Amazon has guided to:

amazon_preview

Growth-  it’s all about growth

Amazon’s forecast called for a broad range of growth from 14% to 25%.  The ChannelAdvisor data came in at 17% from a SSS perspective (for Holiday 2015, November 1 to December 31).  Note that when Amazon reports, they don’t look at SSS, so this is a bit apples and oranges.

In Q3, a couple of key components of Amazon accelerated – specifically what they call EGM (Electronics and General Merchandise) which is where the bulk of the third-party (3P) or marketplace activity is, so we recommend Amazon 3P sellers monitor this metric very closely.

For each 1% that Amazon grows faster than e-commerce that’s about .8b in GMV (just 1P) that they have pulled out of the market, so the y/y growth rate is very important and indicates the strength of Amazon’s share gains against not only online competitors, but at their large scale offline as well.

Other Items we’re watching

In addition to the key performance indicators in the results tracker, we’ll also be listening for:

  • Amazon Prime – Research firm, CIRP, is out with a report putting Amazon Prime at 54m subscribers.  Our estimate is a bit lower at 40-45m, but  the Prime ‘fly wheel’ is definitely working so we’ll be listening for any tidbits on Prime and where Amazon is taking this popular program.
  • Prime Now – Heading into Q4, Amazon rolled out Prime Now (1hr $7.99 / 2hr+ free delivery) to 20+ cities very rapidly.  This is one of the fastest rollouts we’ve seen, so we’re keen to hear what about the program has Amazon so excited.
  • Echo/Alexa – One of the surprise breakout products of  2015, and a surprise star of the CES consumer electronics show.   The open platform married with excellent cognitive abilities are making Echo very popular with consumers.  While everyone remembers and focuses on Amazon’s failures in hardware (Fire Phone anyone?), products like Echo give Amazon a very interesting spot in the connected home.  Married with Prime, it enables people to say: “Alexa, order some replacement air filters’ and bam, they show up in two days.

This blog post was written by Scot Wingo, Co-founder and Executive Chairman, ChannelAdvisor.

 

Talk to an ExpertRequest A Call