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Yahoo
2 days ago
- Business
- Yahoo
Inside Amazon's radical redo of the 'Everything Store'
This post originally appeared in the BI Tech Memo newsletter. Sign up for the weekly BI Tech Memo newsletter here. Hello, and welcome to your weekly dose of Big Tech news and insights. I'm your host, Alistair Barr. My dog Maisie came through her surgery. That cost thousands of dollars. How much would you pay to keep your furry friend alive? We reveal a radical overhaul of Amazon's online marketplace that's been hotly debated inside the tech giant. An exclusive look at one of Microsoft's top cloud customers, sharing big numbers you've never seen before. New data suggests Big Tech stock-based compensation could be under pressure. In 2013, my old boss Brad Stone published "The Everything Store." It's the defining book about Amazon's giant e-commerce business. The key idea in the book was infinite product selection. This strategy propelled the company to become the Western world's largest retailer. Based on quarterly sales, it overtook Walmart earlier this year. Having endless inventory means shoppers are more likely to find what they're looking for on Amazon, increasing the chances they buy something, and return again. That's been a powerful advantage over physical retail stores, which can only stock so much. However, in recent years, some of Amazon's digital aisles have become cluttered and outdated, which could confuse or frustrate shoppers. So, under CEO Andy Jassy, the company has been purging billions of product listings via a secret project known as "Bend the Curve." Business Insider's star tech reporter Eugene Kim has the scoop with all the juicy details. Does this spell the end of The Everything Store? Nope. There's no way Amazon would give up this hard-won advantage. Instead, it's mostly about cleaning up this giant online marketplace. Product listings get old. Sellers can chuck thousands of listings on there, and some are inaccurate or worse. There are also millions of dollars in cloud savings from not having to host billions of unproductive listings. Still, this big move has been debated inside Amazon, according to Kim's report. And surveys by Evercore ISI found that fewer shoppers think Amazon's product selection is the best. READ MORE Other BI tech stories that caught my eye lately: Exclusive: New numbers show just how big a customer Walmart is for Microsoft's cloud business. This venture capital firm bought a hospital chain. Why? Exclusive: Meta's big bet on virtual reality isn't stopping it from opening retail stores. I thought everyone knew not to speak their minds in work surveys? Apparently not. The life of the digital nomad is getting harder. My take on who's up and down in the tech industry right now, including updates on Big Tech employee pay. UP: Tesla surged this week after Elon Musk said he's getting back to work. DOWN: In late February, investor Ross Gerber predicted a 50% drop in Tesla's share price. The stock is up roughly 20% since then. Ouch! COMP UPDATE: Analysts at Cantor Fitzgerald looked at restricted stock units issued recently by tech companies including Meta, Google, and Uber. RSUs are the main way tech employees get paid. The latest numbers show these equity awards are slowing down or even falling at some companies. The chart below shows changes in RSU grant value per employee. Other Big Tech stories I found on the interwebs: Making a video with fancy new AI tools is harder than you might think. (WSJ) Satellite smackdown: Apple versus SpaceX. (The Information) A self-driving truck startup siphoned trade secrets to Chinese companies. (WSJ) You can't develop chips without software from Cadence and Synopsys. The US is trying to limit China's access to this tech. (FT) This week, I'm telling you about an AI tool that may not be immediately obvious as AI. But it most certainly is. Tesla uses thousands of chips in massive data centers to train AI models that understand video collected from millions of the company's vehicles. This is used to develop FSD software for near-autonomous driving. I've been using FSD a lot this year in my Tesla Model 3 Performance. Here are the highs and lows. Is this a fair assessment? Tesla plans to roll out a full robotaxi service in Austin in June. This will be fully autonomous, with no human supervision. It's a huge leap. My FSD software still requires me to be responsible and alert. But this FSD diary gives some pretty solid clues to how capable Tesla's current software is. What AI tool should I use next week? Let me know. I would love to hear from anyone who reads this newsletter. What am I doing wrong? What do you want to see more of? Specifically, though: I want to know about your recent experiences with Amazon's online marketplace. Have you noticed an improvement in the quality of listings lately? Or have you sensed any change in product selection? Let Eugene Kim know at ekim@ Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
3 days ago
- Business
- Business Insider
Inside Amazon's radical redo of the 'Everything Store'
Hello, and welcome to your weekly dose of Big Tech news and insights. I'm your host, Alistair Barr. My dog Maisie came through her surgery. That cost thousands of dollars. How much would you pay to keep your furry friend alive? Agenda We reveal a radical overhaul of Amazon's online marketplace that's been hotly debated inside the tech giant. An exclusive look at one of Microsoft's top cloud customers, sharing big numbers you've never seen before. New data suggests Big Tech stock-based compensation could be under pressure. Central story unit In 2013, my old boss Brad Stone published "The Everything Store." It's the defining book about Amazon's giant e-commerce business. The key idea in the book was infinite product selection. This strategy propelled the company to become the Western world's largest retailer. Based on quarterly sales, it overtook Walmart earlier this year. Having endless inventory means shoppers are more likely to find what they're looking for on Amazon, increasing the chances they buy something, and return again. That's been a powerful advantage over physical retail stores, which can only stock so much. However, in recent years, some of Amazon's digital aisles have become cluttered and outdated, which could confuse or frustrate shoppers. So, under CEO Andy Jassy, the company has been purging billions of product listings via a secret project known as "Bend the Curve." Business Insider's star tech reporter Eugene Kim has the scoop with all the juicy details. Does this spell the end of The Everything Store? Nope. There's no way Amazon would give up this hard-won advantage. Instead, it's mostly about cleaning up this giant online marketplace. Product listings get old. Sellers can chuck thousands of listings on there, and some are inaccurate or worse. There are also millions of dollars in cloud savings from not having to host billions of unproductive listings. Still, this big move has been debated inside Amazon, according to Kim's report. And surveys by Evercore ISI found that fewer shoppers think Amazon's product selection is the best. News++ Other BI tech stories that caught my eye lately: Exclusive: New numbers show just how big a customer Walmart is for Microsoft's cloud business. This venture capital firm bought a hospital chain. Why? Exclusive: Meta's big bet on virtual reality isn't stopping it from opening retail stores. I thought everyone knew not to speak their minds in work surveys? Apparently not. The life of the digital nomad is getting harder. Eval time My take on who's up and down in the tech industry right now, including updates on Big Tech employee pay. DOWN: In late February, investor Ross Gerber predicted a 50% drop in Tesla's share price. The stock is up roughly 20% since then. Ouch! COMP UPDATE: Analysts at Cantor Fitzgerald looked at restricted stock units issued recently by tech companies including Meta, Google, and Uber. RSUs are the main way tech employees get paid. The latest numbers show these equity awards are slowing down or even falling at some companies. The chart below shows changes in RSU grant value per employee. From the group chat Other Big Tech stories I found on the interwebs: Making a video with fancy new AI tools is harder than you might think. (WSJ) Satellite smackdown: Apple versus SpaceX. (The Information) A self-driving truck startup siphoned trade secrets to Chinese companies. (WSJ) You can't develop chips without software from Cadence and Synopsys. The US is trying to limit China's access to this tech. (FT) AI playground This week, I'm telling you about an AI tool that may not be immediately obvious as AI. But it most certainly is. Tesla uses thousands of chips in massive data centers to train AI models that understand video collected from millions of the company's vehicles. This is used to develop FSD software for near-autonomous driving. I've been using FSD a lot this year in my Tesla Model 3 Performance. Here are the highs and lows. Is this a fair assessment? Tesla plans to roll out a full robotaxi service in Austin in June. This will be fully autonomous, with no human supervision. It's a huge leap. My FSD software still requires me to be responsible and alert. But this FSD diary gives some pretty solid clues to how capable Tesla's current software is. What AI tool should I use next week? Let me know. User feedback Specifically, though: I want to know about your recent experiences with Amazon's online marketplace. Have you noticed an improvement in the quality of listings lately? Or have you sensed any change in product selection? Let Eugene Kim know at ekim@
Business Insider
3 days ago
- Business
- Business Insider
Amazon's secret 'Bend the Curve' project purges billions of product listings from the Everything Store
Call it an " Everything Store," just without the clutter. Amazon has been getting rid of billions of product listings deemed "unproductive" through a confidential project called "Bend the Curve," according to an internal planning document obtained by Business Insider. The document reveals that Amazon planned to remove at least 24 billion ASINs, or unique product listings, from its marketplace. These underperforming items range from poor-selling items to those with misleading descriptions or inactive pages. "Reduce active ASINs in the Amazon Catalog to be less than 50B (projected to be 74B by EOY 2024) by cleaning up unproductive selection," the document stated, giving a deadline of December 2024. Bend the Curve is part of a broader cost-cutting strategy led by CEO Andy Jassy, who took the helm in 2021. Eliminating billions of product listings helps Amazon's retail business control cloud costs as it doesn't have to host as many product pages online. The initiative is notable for Amazon, which has spent 3 decades relentlessly expanding its product catalog in pursuit of a limitless online marketplace — a strategy that earned it the nickname "The Everything Store." Amazon is still growing its vast selection, but the company is putting more focus on removing low-performing or inaccurate listings in favor of a more streamlined and effective catalog. Striking a tricky balance Having almost infinite selection means shoppers are more likely to find what they're looking for on Amazon, increasing the chances they buy something, and return again. That's been a powerful advantage over physical retail stores, which can only stock so much. Amazon is highly unlikely to give up the benefits of this massive product selection. However, some of the company's digital aisles have become cluttered and outdated in recent years, which could confuse or frustrate shoppers. Striking a balance between these two goals could be tricky, and Bend the Curve has been hotly debated internally, according to a person familiar with the project. Some Amazon shoppers may already be noticing. According to Evercore ISI's annual online retail survey, fewer respondents believe Amazon offers the best product selection. In 2022, a record-high 84% of respondents gave Amazon top marks for selection. That figure fell to 79% in 2023, and declined further to 68% last year, marking a record low in the survey's 12-year history. "Phasing out items" In an email to BI, Amazon's spokesperson said the company will continue to expand its active product listings. The initiative is intended to clean up data, not curtail selection, the spokesperson said, adding Amazon added millions of new items to its product catalog last year. "We have a cost-reduction initiative in place to remove unhelpful data, including product listings that are inaccurate, incomplete, or in other ways fail to meet our listing requirements," the spokesperson told BI. "The aim is not to reduce active product listings." The number of "active ASINs" does not correspond exactly with the actual product selection visible to customers, and reducing that number doesn't always equate to a reduction in selection. "Unproductive selection" includes items that can't be purchased, for instance, if there's no actual inventory to support a listing, or if product listings haven't been updated for more than two years, the spokesperson explained. "Our teams regularly review product listings based on performance, quality, and evolving customer needs — and we've done this for many years," the spokesperson added. "In some cases, it may involve phasing out items that no longer meet our standards or are being replaced by newer versions. The goal is always to refine, not restrict, selection, ensuring our shopping experience meets the highest standards." The spokesperson added that there was "no debate in the sense of whether to proceed" with the Bend the Curve project. "Leadership made clear throughout the process that the work should not, even by accident, negatively impact selling partners or remove selection from Amazon, and we put guardrails in place to ensure that didn't happen," the spokesperson added. 'Throttling' listings For years, Amazon has simplified the process of becoming a seller on its platform. These third-party merchants are now responsible for more than 60% of all products sold on Amazon. Amazon believes that growing the number of third-party sellers and expanding product selection fuel a flywheel: more choices lead to happier customers, attract more shoppers, and ultimately drive continued growth. In Amazon's 1999 shareholder letter, founder Jeff Bezos envisioned a place where people could "come to find and discover anything and everything they might want to buy online." However, Amazon's drive to create a limitless aisle of products has come with challenges. The platform has faced issues with counterfeit goods, expired food items, and non-compliant products, leading to consumer complaints and regulatory scrutiny. Amazon has taken many steps to tackle counterfeit goods in the past. And with Bend the Curve, Amazon is putting other controlling measures in place. In 2024, Amazon launched a new "creation throttling" feature that blocks new product listings from some underperforming seller accounts, the internal document showed. The company targeted at least 12,000 active sellers with catalogs of more than 100,000 product listings and no sales in the previous 12 months as part of the program, according to the document. This enforcement prevented more than 110 million new listings from being created, while nearly 3,000 sellers got warning messages for being close to the throttling threshold. The document said some of the sellers exited enforcement by modifying their listings or increasing their sales. The initiative "promoted significant catalog cleanup," it added. Bend the Curve also led to confusion among some sellers regarding the policy's scope. According to the document, only "unproductive" accounts were affected. However, some sellers with multiple accounts mistakenly believed that their entire accounts were being blocked from creating new listings. In response, Amazon is focusing this year on more clearly "defining policy enforcement and communication" to avoid misunderstandings, the document said. The company is also analyzing deleted listings to determine if there are identifiable patterns. 'Cost avoidance' By removing or streamlining unproductive listings, Bend the Curve saved more than $22 million in AWS server costs in 2024, the document said. Amazon projected an additional $36 million in AWS server "cost avoidance" in 2025 as the initiative continues. Amazon's retail division expected to spend approximately $5.7 billion on AWS cloud infrastructure in 2025, a 27% increase from last year's $4.5 billion, according to another internal planning document obtained by BI. That's a slower growth rate compared to the previous year, when AWS server costs rose 36% from about $3.3 billion in 2023.
