Marketplace Briefing: Project Amelia is like ChatGPT for Amazon merchants
This is the latest installment of the Marketplace Briefing, a weekly Modern Retail+ column about the ever-changing e-commerce marketplace landscape. More from the series →
Amazon, like many e-commerce players, is beefing up its Rolodex of generative AI tools for merchants.
During the fifth edition of its annual sellers’ conference known as Amazon Accelerate, the e-commerce giant unveiled a slew of AI-powered features that the company says will help speed up productivity, boost sales and simplify operations for its merchants. The pièce de résistance is a new chatbot-like AI personal assistant called Project Amelia, which can understand and answer business-related questions or prompts. As of today, a beta version of Amelia is available to a limited set of sellers in the U.S., with a wider release planned in the coming weeks. Amelia will be rolled out in additional countries and languages other than English later this year.
Like many other tech giants, Amazon has been pouring money into AI, ramping up spending on data centers, chips and real estate needed to power artificial intelligence. The company’s capital expenditures totaled more than $30 billion, mostly to boost AWS infrastructure, in the first half of the year, and the company expects that to increase in the second half. Amazon has previously released an array of AI-powered tools for merchants, who account for most of the sales on Amazon, including autogenerated product descriptions and product pages that can be created with just the copy-and-paste of a link. More than 400,000 sellers worldwide have adopted Amazon’s generative AI product listing tools, the company said Thursday.
“The onus of this is based on the fact that a lot of small and medium-sized businesses sell in Amazon’s store, and it can be complex and time-consuming to run a business,” Mary Beth Westmoreland, vp of worldwide selling partner experience at Amazon told Modern Retail in an interview. “The theme here is to take a lot of that burden and time off of our selling partners.”
Amelia functions as a support chatbot for merchants, helping them do things like summarize sales data, such as units sold and website traffic, and suggest specific retail strategies. Amelia can answer Seller Central-specific questions along the lines of “How do I list a product?” and “How do I inbound my inventory?” Amelia can also address questions sellers might have related to their specific business metrics, such as, “Am I growing year over year?” A demo of Project Amelia showed the AI assistant can dole out personalized business advice, such as how a particular brand should prepare for the peak holiday season and suggestions for new inventory.
Eventually, Amelia will be able to diagnose problems, offer issue resolution and even offer to take action on behalf of sellers, Westmoreland said.
The new AI applications are built on Amazon Bedrock, AWS’s generative AI service, which was announced in April 2023. Westmoreland explained that the new AI capabilities are also powered by proprietary Amazon data, including merchant business data, but in such a way that data and conversations are protected from third parties.
“I want to note there are very specific and strong guardrails about how we protect data and security of our selling partners,” Westmoreland said.
Given that artificial intelligence is still nascent, and AI-powered tools have been known to generate incorrect or misleading results, Westmoreland stressed that Amazon has measures in place to ensure accuracy. In general, Amazon has experts who audit and provide feedback on the accuracy of the data that forms the building blocks of the company’s AI tools. Amazon also relies on feedback from sellers themselves, which not only helps the company refine the models that power merchant tools but also lets Amazon understand what sellers care about most, Westmoreland said. Over time, Amelia will evolve to provide sellers with more personalized responses to more complex questions.
Amazon made a handful of other AI-focused announcements, too. Later this year, Amazon will expand its AI-powered product listing tools to help sellers create multiple listings at the same time, which will include key components like automated titles, bullet points and descriptions.
Another AI tool called Video Generator will help sellers turn static photos of products into custom video advertisements. Previously, this was something brands would have had to have invested significant time and energy into to create themselves or pay someone else to do, Westmoreland said.
Amazon is also adding AI to its A+ Content tool, which helps brands create custom content like image carousels and comparison charts on their product detail pages. Like video ads, creating this type of content could cost sellers a lot of extra time and money. A+ Content can drive a sales lift of up to 20% for brands, according to the company. The tool, which launches today, is free and available to sellers in the U.S. and will roll out in more countries by the end of the year.
Finally, Amazon is using AI to leverage customers’ shopping history to create more personalized product recommendations on its web store. For example, instead of offering customers “More like this,” a customer will be given more specific recommendations, such as “Gift boxes in time for Mother’s Day” or “Cool deals to improve your curling game.”
Retailers, in general, have embraced artificial intelligence. Last year, e-commerce rival Shopify unveiled Shopify Magic, a collection of free-to-use AI features, including a chatbot-like commerce assistant for merchants called Sidekick. It became available to a limited set of merchants earlier this year. Ebay sellers can generate product descriptions with artificial intelligence. Last month, Walmart executives told investors that AI was a hundred times more productive than human workers at updating and rewriting product listings. The retailer also has plans to roll out a new AI-powered shopping assistant.
Despite the hype, artificial intelligence is still new, and the results aren’t always what brands or customers want. Amazon merchants have reported misleading product reviews as a result of AI, per Bloomberg. The rise of AI has even accelerated the issue of counterfeits on marketplaces, including Amazon, Modern Retail previously reported. Some Amazon sellers have expressed skepticism about AI having a hand in their product listings.
Asked if Amazon could point to success metrics that showcase Amelia’s ability to boost sales and productivity, Westmoreland said, “It’s still early days for us right now, so we just don’t have enough data to be able to respond at this point on specifics, but we will over time.” She added, “We did test this with a small subset of our selling partners, and what we do know is that they’re pretty excited about the experience and they see a lot of value in it.”
Even though AI can be a divisive topic, Amazon sellers who spoke to Modern Retail generally seemed cautiously optimistic about the potential for AI-powered tools, including chatbots, to free up their time.
To Lori Barzvi, founder and CEO of Pupiboo, which sells washable pee pads for dogs, chatbots, in particular, “can be a valuable tool for a seller,” especially when it comes to automating and speeding up rote tasks.
Steven Pope, a seller who runs a retail arbitrage business as well as the Amazon agency My Agency Guy, echoed Barzi’s sentiments. Where AI falls short is problem-solving, he said. If a client has a problem, whether they’re a seller or a customer, he said a live person is usually needed.
Although, in some cases, AI has led to mistakes, Judah Bergman, the CEO of Jool Baby, believes that any kinks will be worked out as the technology evolves. As Bergman put it, “I think it’s good for commerce in general.”
Amazon continues to ramp up its logistics network
On Wednesday, Amazon announced it was expanding its logistics network with a new fully managed end-to-end supply chain service that the company says will speed up deliveries and boost sales.
The fully managed solution adds to Amazon’s existing suite of supply chain services it offers to merchants. Last year at Amazon Accelerate, Amazon introduced “Supply Chain by Amazon,” which provides a range of supply-chain services, like using Amazon Global Logistics or its Partnered Carrier Program to ship inventory in bulk to Amazon warehouses. As such, Amazon made it clear that it sought to expand its reach to all aspects of the supply chain, not just fulfillment.
Previously, sellers had to cherry-pick which services they wanted to use and manage all decisions on product movement, Dharmesh Mehta, vp of worldwide selling partner services at Amazon, told Modern Retail in an interview. In contrast, this new fully managed option functions like an all-in-one package that automates the movement of products through Amazon’s supply chain services, ostensibly so sellers can spend less time managing their supply chain. Now, a seller only has to provide product details and pickup locations.
The fully managed optioni will be available to all U.S. sellers for domestic pickups in October and will be expanded to global pickups by the end of the year, the company said in a news release. Mehta also said that a couple hundred thousand sellers are using at least one of Amazon’s supply chain services, while the adoption of multiple solutions has tripled in the first half of 2024.
Amazon’s fully managed option is designed to simplify operations for sellers by providing a range of services that traditionally have been offered by a multitude of other companies, Mehta said. “When something goes wrong, sellers have to coordinate with these different companies that don’t work directly together,” Mehta said. “It’s both a bunch of headache and a bunch of cost.”
It makes sense that Amazon wants to touch as much of the supply chain as possible. For years, the company has been on a mission to monetize its vast network of warehouses and transportation it has built over the past couple of decades. Such expansion helps grow Amazon’s revenue from seller services, which generated more than $36 billion in revenue during the second quarter of 2024, a 12% increase from the same period a year before.
Amazon is looking to attract merchants to its new offering with various discounts, including a 25% discount on storage fees and a 15% reduction in transportation and processing costs associated with Amazon Warehouse and Distribution services. Sellers who opt-in will benefit from faster delivery speeds and, in turn, higher sales, according to the company.
“Sellers are able to see sales conversions on average lift by 20%, and so it’s not only lower cost, it’s more sales,” Mehta said.
With this new offering, Amazon is making a “bold” move to win over its marketplace sellers, who have seen several years of steadily rising fees, according to Jon Elder, CEO and founder at Black Label Advisor, which manages hundreds of brands. Modern Retail previously reported on a slew of new seller fees Amazon imposed earlier this year.
Elder said some third-party sellers might be hesitant to sign up, if just because many are already using similar services from other companies. Sellers might also be wary of ceding more control of their businesses.
Travis Johnson, the global CEO of Amazon marketing agency Podean, struck a more optimistic chord regarding the news.
“As a global agency, we see first-hand the struggles and challenges large sellers have with moving stock between countries,” Johnson said in an email statement. He added that such difficulties can hamper brands’ expansion plans. “As always with Amazon, we’ll wait to see if the operations experience is as streamlined and simplified as the press release but the promise of simplified and cheaper transport and warehousing will be attractive for many of our brands.”
Sellers can choose the fully managed option or continue to choose which supply chain services they want to use and manage product movement decisions on their own, according to the company.
Marketplace news to know
- Amazon also unveiled several Buy With Prime updates, including real-time delivery estimates in TikTok ads and PayPal as a checkout option.
- YouTube and Shoppee announced plans to launch a new e-commerce service in Indonesia.
- Roku unveiled a new self-serve ad platform that includes a Shopify integration for shoppable ads.