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Inflation helps Amazon back on top as competitors struggle


Amazon’s latest earnings report looked extraordinary as the effects of inflation lingered and big retailers emerged from massive overstocks. The company recorded his 4% decline in online sales, while revenue from third-party seller services (warehousing, packaging, and shipping) increased him 9%.

Nearly 1 million Netflix customers canceled their subscriptions amid the deteriorating economic climate. Meanwhile, Prime membership revenue, which includes the video streaming service, surged 14% in the second quarter, according to Amazon.

what to do with all this? Amazon, which benefited in its delivery services from the 2020-2021 pandemic lockdowns, is now benefiting from its low-price leader role. Recent research by First Insight The results show that 80% of consumers are feeling less confident about spending money. An overwhelming majority believe prices will remain high for at least the next 6 to 18 months, and 79% believe we may already be in recession, enough to suggest a self-fulfilling prophecy. It’s a number.

Inflation may ease and jobs may be plentiful, but the pain won’t go away anytime soon. In the near future, pricing strategy should become a top concern for retailers and a focus of customer research.

For the consumers we surveyed, the main driver is the price of groceries, considered a priority by 59% of respondents, compared to just 10% for apparel, footwear and accessories. The average U.S. household spent $460 more per month on the same basket of essentials and services in June than in 2018 and 2019. Ryan SweetSenior Economist at Moody’s Analytics.

The degree of squeeze appeared Latest Digital Price Index from AdobeOnline prices fell 1% year-on-year in July, down 2% from June, marking the first 25 consecutive months of prices falling instead of rising, according to the report.

The index fell 9.3% in electronics, 8.2% in toys and 3.1% in jewellery. Meanwhile, food prices have risen for his 30th straight month, rising 13.4% year-on-year in July.

For the retail industry, earnings approach the worst case scenario. Discretionary spending on higher-margin items than normal is receding. This suggests that the critical fall and holiday seasons can have anemic consequences.

The so-called mass resignations and mass retailer hiring required of store and warehouse workers during the pandemic has strained revenues to the point that many companies have laid off employees.

e-commerce platform Shopify announced In July, we plan to reduce our 10,000 employees by 10%. Similar notice More recently, we’ve seen products from Victoria’s Secret, Stitch Fix, Warby Parker, and many others.

Craig Rowley of management consultancy Korn Ferry said today’s layoffs could hurt retailers later when business recovers. “We have an unpredictable economy and unpredictable customers,” he said. Modern Retail.com“Next year is not going to be a fun place for all businesses, especially most leaders in retail.”

As I keep saying, the world remains very dynamic and the only way to deliberately plan is to stay ahead of it and not panic or overreact. How?

Sounds easy…just ask your customers…they know. Collective intelligence has been around for over a decade and a half. Investment firms, banks, manufacturers, and even governments are using it…the era of retail and the tipping point has come. Stop reacting and start predicting.


https://www.forbes.com/sites/gregpetro/2022/08/26/as-competitors-struggle-inflation-helps-put-amazon-back-on-top/

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