With its non-grocery brick-and-mortar stores largely in the rear-view mirror, the pandemic-related e-commerce surge abating and legacy retailers catching up, Amazon has entered a new phase.
The e-commerce giant’s most high-profile move of this new era so far has been to shrink its workforce, which analysts recently noted will help it improve the margins and profitability of its retail operation. But the cost of goods, of technology and content, and of music and video were the largest contributors to Amazon’s retail margin weakness in 2022, according to number-crunching from William Blair analysts led by Dylan Carden. Not, as Amazon executives have suggested, higher shipping and fulfillment costs, Carden said in a research note last week.
