Amazon

Amazon Tracker: Revenue Games

Since last we turned our lens toward Amazon, the online retail and cloud computing behemoth’s stock has slipped down some from the all-time high seen in the third week of February. While values remained relatively flat through the first few days of March, this week AMZN opened on a down note.

On Monday morning (Mar. 6), Amazon opened at $845.14, down over $4 from the previous Friday’s close and trending downward as the morning progressed. At the time of writing, AMZN had risen a bit to $845.96, down 0.46 percent from Friday’s close. The company’s market cap sat at over $404 billion.

These numbers are certainly nothing to scoff at, especially since the retail giant’s stock has been trending upward in the long-term, though slowly flattening out in the past nine months or so.

Still, a number of analysts remain relatively certain that big things are on their way for AMZN numbers — specifically, a value to the tune of $1,000+ within the next few years. This could be especially plausible if Amazon can continue to grow its sources of revenue.

On the eCommerce end, Amazon continues to roll out new private-label products to its online marketplace, upping convenience for brand-loyal Prime members while causing additional anxiety for competing merchants of the online, omnichannel and physical varieties. According to a report by analytics firm One Click Retail, Amazon has launched over 50 private-label products in the past three months.

Most recently, the online retail giant added a new product line to its Amazon Elements brand, one of Amazon’s earlier private-label endeavors which sold baby wipes (and a line of diapers for a short time back in 2015). Since the end of February, Amazon has been selling its own line of vitamin supplements, including turmeric root extract, calcium complex, vitamin D2 and vitamin K2 supplements.

The supplement products come with a QR code that allows buyers to access quality reports, product origins and a list of ingredients, playing into growing consumer interest in knowing the source of products they purchase, their composite ingredients, and other sustainability and health information.

Meanwhile, sales of Wickedly Prime, Amazon’s private-label food venture, are still small, said One Click Retail, showing only mild growth and comprising less than 1 percent category share since its debut at the tail end of 2016.

But perhaps online sales of these products aren’t the end goal for Amazon. What many of the released private-label products have in common is their readiness to be sold in supermarkets — namely, stocking the shelves at Amazon Go.

Consumers still await the public opening of Amazon’s grocery venture, which is expected to come sooner rather than later. Though the 2,000+ store ambitions turned out to be false, according to the company, Amazon Go’s public debut could be the “shot heard ’round the world” for retail grocers worldwide, which are waiting for what seems like the inevitable Amazon Effect to kick in.

On the streaming side, Amazon pushed Prime Video out worldwide late last year, putting it in a prime position to compete with the likes of Netflix and Hulu for subscription revenue. Likewise, for 2016, Amazon’s cloud-computing arm Amazon Web Services’ revenue hit $12.2 billion in sales.

Now it appears that Amazon may also be quietly pushing to tip the $37 billion annual search advertising revenue scales away from lion shareholder Google.

“In the past 12 to 18 months, we’ve really been focusing on search,” Seth Dallaire, Amazon’s vice president of Global Advertising Sales, told The Wall Street Journal. “It’s still really early days for us. We’re still building a lot of the capabilities and tools some of these big buyers expect of us.”

As of now, Amazon’s Product Display Ads, which feature products on Amazon relevant to consumers’ internal web and mobile searches, is one of the company’s three major search ad-related endeavors of the past few years. But the company is gearing up for more.

Amazon has been hinting at a paid search platform endeavor since mid-January — an effort to monetize search traffic to its eCommerce site and enhance relationships with brands and advertising agencies.

At AdExchanger’s Industry Preview conference, Dallaire said, “There’s an expectation from people who visit Amazon [that] they’re going to find anything they want. If you have the confidence that we’re going to meet that expectation, you might just come to Amazon to start that search.”

While changes to the balance of power in the search advertising space won’t happen overnight, it could become a major source of revenue for Amazon.

In fact, it may already be growing.

According to Amazon’s Q4 earnings report, the “other” revenue segment in its North American market — which Business Insider said could largely be comprised of online advertising sales — saw 60 percent growth in 2016 to $1.3 billion.

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