Every week I dive deep into Amazon strategy, advertising insights, and e-commerce trends—here’s a quick roundup of what caught my attention this week and what I wrote about.

Amazon’s Fulfillment Strategy (Increased Placement Costs)

Amazon just quietly transformed its fulfillment strategy—and it’s kind of a big deal.

Over the past year, Amazon transitioned its U.S. fulfillment network into 8 distinct regions, a strategy known internally as "Regionalization."

Historically, Amazon's fulfillment network thrived on fewer, larger fulfillment centers (FCs), maximizing inventory coverage but requiring extensive (and expensive) cross-country shipping. But as the number of fulfillment centers expanded rapidly—this model became complex, inefficient, and costly.

Enter regionalization. The concept is simple but powerful:
- Divide the U.S. into eight dedicated regions.
- Serve each region primarily through its own set of local FCs

The results?
- Before regionalization, only 62% of customer orders were fulfilled within their local region.
- Post-transition, this figure surged to 76%, dramatically cutting down on long-haul transportation.

Amazon scientists spent over a year optimizing models, simulations, and logistics plans. The funniest part of this regional breakout: part of Kansas is considered to be Northwest, Michigan is not in the Great Lakes and Texas has its own region.

Target Advertising - Newly Announced

Target just revealed its advertising revenue for the first time in their earnings report.

Last year, Target’s advertising business (Roundel) generated $649M. Let’s put that into perspective against the retail media giants:

• Amazon Advertising – $56.2B last year
• Walmart Connect – $4.4B last year
• Target - $649M last year

This means Target’s ad revenue is roughly 1% of Amazon’s and about 14% of Walmart Connect’s.

Fumbling HBO

Warner Bros. might be giving us a masterclass in brand dilution with their handling of HBO

Recap:
- Removing “HBO” from HBO Max: Dropping the iconic HBO branding diluted the premium feel that audiences associate with HBO’s legacy.
- Warner Bros. Discovery made the decision to merge HBO Max with Discovery+, rebranding it simply as 'Max.' Huh?
- Warner Bros. Discovery reduced investments in prestige HBO originals to cut costs
- Mixing reality TV from Discovery+ (e.g., 90 Day Fiancé) alongside premium content (Succession, The Last of Us)

Brands invest heavily in premium placements, especially around iconic names like HBO. Advertisers may hesitate to pay premium CPMs for 'Max' placements without the cachet of the HBO brand.

Retail Media Networks - Strategic Overview

Retail Media Networks (RMNs) are everywhere—but honestly, the name feels stale and uninspired. Can we do better?

Brands are pouring billions into these platforms, leveraging first-party shopper data to drive smarter ad targeting and measurable results. Amazon dominates, generating ~$56B annually and standing out with its own DSP—something rivals haven’t matched yet.

Other retailers like Walmart, Kroger, Instacart, Target, and Costco are all vying for a piece of the pie, but they’re still building capabilities. Most partner with third-party DSPs, notably The Trade Desk, to unlock their shopper insights.

RMN feels vague—perhaps it’s time to rebrand. Commerce Media? Point-of-Sale Media?

Amazon’s Share of Retail Spending

Amazon share of spending by retail product category

Most interesting trendline is grocery (food & beverage). 2.5% retail share in 2019, 6.8% in 2024.

I talk about Amazon, e-commerce, and advertising strategy in my weekly newsletter.

I also spent 7 years working at Amazon in Seattle under the most influential people at the company, now I consult for some of the largest Amazon brands in the world.

If you ever want to chat Amazon - feel free to drop me a note!