Amazon Digest - ecommerce news roundup - 01.26.25

Enough interesting things have happened in January so far, which called for a dedicated news ecommerce digest edition today.

1. Q4 Retail Media Benchmarking Report

Pacvue issued a benchmarking report on the Q4 state of retail media advertsing. Some relevant highlights:

• Retail Media Landscape: Amazon continues to dominate, projected to capture 76% of all retail media ad spend in 2025. Walmart follows with 8% market share, with strong growth in its advertising ecosystem​​.

• On Amazon Sponsored Products ad spend increased by 10.2% YoY, while CPC grew 3% YoY​. It reflect increasing number of sellers, maturity of the platform. And the fact you can’t outspend your way to growth unless you have huge budgets. 

  Category Highlights for Q4

  Home & Kitchen 

  • Steady Growth: Home & Kitchen continues to demonstrate robust performance on Amazon and Walmart, driven by holiday gifting and everyday essentials. Sponsored Products saw a significant share of ad spend in this category​​.
    

  Beauty & Personal Care 

  • Highly Competitive: This category is particularly strong on Amazon and Instacart, with many CPG brands leveraging platforms to target holiday shoppers. Advanced targeting features in Amazon DSP (like segmentation via AMC) can boost performance for this category​.

  Grocery 

  • Instacart’s Core Strength: Instacart Ads showed a 10.1% YoY increase in ad spend, with grocery brands benefiting from in-cart ads and impulse purchase placements. Holiday-related grocery purchases saw an uptick in Sponsored Product performance​.

  Health & Wellness 

• Post-Holiday Momentum: Health and wellness brands, including vitamins and supplements, see increased traction in Q4 and early Q1 as consumers prepare for New Year resolutions​.

2. Marketplaces Shopping Behavior Report for 2025

This study was done by Channel Engine in largest European markets and the US.

Dominance of Marketplaces

• 47% of consumers now start product searches on marketplaces, surpassing search engines and brand websites.

• 63% of shoppers prefer marketplaces for wider selection, competitive pricing, and faster shipping.

Leveraging Customer Behavior

•  56% of shoppers make unplanned purchases on marketplaces, influenced by features like "customers also bought." - aka impulse buys

• 77% of buyers consider reviews during purchases, though trust remains a concern

  Emerging Trends in ecommerce

• TikTok Shop and Facebook are gaining traction as sales channels, especially among younger demographics.

• Home & Living, Clothing, and Health & Beauty are among the most browsed and purchased product types on marketplaces.

3. Looming tariffs

In Mexican Spanish, there is a phrase Quién sabe ("who knows") which conveys uncertainty, mixed with apathy and acceptance of a lack of control. That sentiment perfectly describes the situation with tariffs.

As someone living in Mexico (a country targeted for increased tariffs) and working in e-commerce, I’m following the topic closely.

Here’s a quick recap:

As of January 24, 2025, the U.S. administration is considering a 10% duty on Chinese imports, potentially starting February 1, 2025. Tariffs of 25%-100% on imports from Mexico and Canada are also on the table, though enforcement delays suggest a negotiation tactic. The timeline and outcomes remain uncertain, leaving businesses scrambling to stockpile inventory, diversify supply chains, and explore reshoring.

Reshoring, however, is challenging—for example, only 7% of U.S. beauty brands manufacture domestically, according to Vogue. Smaller brands, with fewer resources, face the greatest pressure, and passing tariffs onto customers risks losing ground to private-label competitors.

Diversifying supply chain, forward stocking, planning out scenarios, negotiating with supplies - these are logical and smart to do things in the face of events like this.  On paper. It takes time to do it correctly long term, and reacting short term may not align with the actual probabilities of how tariffs will play out.

Speaking of probabilities. let’s play a guesing game. Here is my uneducated and a non-insider estimate of probabilities on when and if tariffs become enforced:

• 30% chance: Tariffs go into effect on time (e.g., February 1, 2025).

• 50% chance: Delays in enforcement due to negotiations or backlash from industries.

• 20% chance: Tariffs are scrapped altogether if lobbying efforts, public opinion, or macroeconomic risks weigh heavily

Time will tell.

Saludos,

Irina