Amazon News – October 2020
Here’s a summary of what happened on Amazon during October 2020:
There is no doubt that Amazon is one of the biggest gainers from the changes brought on by the Covid pandemic.
Amazon published its third-quarter reports and tops all predictions, announcing an income of $92.15B and an increase of 37% in sales. The company now has over 1.12M employees worldwide, increasing over 50% compared to last year. (That’s not including temporary and contract workers).
The “Other” category made up mainly of income from Amazon’s Advertising platforms, expanded by 51% and reached $5.4B. Traders who frequently use the advertising system (like me) see the many changes and improvements added to the platform and recognize that this is a growth engine that Amazon invests in.
The Amazon Prime service grew by 33% and now amounts to $6.5B.
Third-party sales grew by 55% – significantly more than Amazon’s growth that was “only” 38%. Physical stores and Whole Foods sales were down 10%.
Amazon publishes a forecast for the 4th quarter and predicts an income of $112-$121B – a 28%-38% increase compared to last year.
The real challenge I see for Amazon is meeting the demand during the holidays. I wonder whether we’ll see strict limitations on the amount of inventory that can be sent to warehouses. There is also a debate on whether Amazon will prioritize sellers who ship themselves and don’t use Amazon’s logistics services while the warehouses are backed-up.
1. A short summary of Prime Day – October 13-14th were Amazon Prime Day – an opening shot for the holiday shopping season, meant to encourage customers to shop early and distribute the pressure on warehouses and shipping.Amazon did not publish Official prime day sales figures, but it states in the quarterly reports that:
* Third site sellers made over $3.5B on Prime Day – a 60% increase compared to last year.
* Amazon Prime members saved over $1.4B in sales and deals.
* The most popular product on Prime Day was the Echo Dot.
* Some estimate that Amazon’s sales on Prime Day reached $10.4B
2. Less than 48 hours after the end of Prime Day, Amazon began to offer early holiday sales.
Amazon launched the Holiday Dash Sales Event – a page that will be available till Black Friday and showcases a different significant discount every day.The aim of promoting sales this early is convincing buyers to shop beforehand and avoid holiday pressure. Technologically, I liked the addition of videos from the Amazon Live page to the sales page to introduce sellers and influencers.
3. What are the next shopping holidays? Mark your calendars:
* November 10-11 is the Israeli shopping holiday Shopping IL – a great opportunity to support local businesses and strengthen our economy.
* November 11th is the famous Chinese Singles Day with lots of offers on Chinese sites and other sites that adopted the holiday.
* Black Friday on November 27th with particularly attractive sales.
* Cyber Monday on November 30th with the sales continuing from black Friday to Cyber Monday.
I hope I haven’t left any out any holiday. If I have – let me know, and I’ll add them to my blog.
4. After 16 months of investigation and following Amazon and other tech giants’ appearance in the US congress, the congressional report was published with the signatures of only the democrat house members. The report concludes that the four Big Tech companies enjoy monopoly power and suggests Congress take up changes to antitrust laws that could result in parts of their businesses being separated.
The claims against Amazon address its control of e-commerce, unfair treatment of third party sellers and vendors that rely on it as a source of income, and its control of cloud services.
It is still unclear whether there is a way to actualize the report’s recommendations and how it can be done, but there is no doubt that the report signifies a shift in the attitude towards tech giants. We will have to wait for the results of the elections to see what comes next.
>> House Democrats say Facebook, Amazon, Alphabet, Apple enjoy ‘monopoly power’ and recommend big changes
5. Interesting new changes in the Search interface: I showed you last month that Amazon gives a direct link to brand stores in the search results. This time we have another new feature: thumbnails of the products you searched for.
6. Amazon introduced its first electric delivery vehicle, developed and built-in cooperation with Rivian. Amazon expects to operate 10K such vehicles before 2022 and 100K before 2030.This is one of 3 models Amazon developed with Rivian. It is fully customized to Amazon’s needs and prioritizes environmental friendliness, safety, innovation, and technology.
>> Introducing Amazon’s first custom electric delivery vehicle, Amazon
7. Amazon Wardrobe now offers Personal Shopper for Men
For just 4.99 per month, Amazon Prime members will be able to get a package of personally fitted clothes chosen according to their style and budget. The package includes 8 items, and there are 7 days to decide whether to keep or return them. The service includes brands such as Levi’s, Carhartt, Lacoste, Adidas, and of course, Amazon house brands.
This should serve as an inspiration to Israeli brands to create Personal Shopper services and send clothing packages to clients for a monthly fee.
8. Amazon introduces One-Hour grocery pickup in all US Whole Foods stores. A new free service for Amazon Prime customers who can purchase orders over $35 and pick them up in an hour.
9. Amazon’s virtual health service Amazon Care is currently available to some Amazon employees in certain US areas. New job listings on Amazon’s job site show that it may be creating a new business development team to “build and grow relationships with commercial and public sector enterprises.” This may indicate that Amazon intends to take the service (quite predictably) further and offer its health insurance to other companies.
The telemedicine market is estimated to reach $17B by 2026, and during Covid, the transition to distant medical services has escalated and even given significant support by the Federal government.
10. Amazon launches Shopper Panel Program and will pay to clients who will enter information about shopping they do outside Amazon. Users will have to upload to a dedicated app 10 invoices of food, apparel, cosmetics, movies, takeout, or any other item purchases from any other platform or store. After answering a questionnaire, the client will receive credit on his Amazon account.
At this stage, the program is for invitees only. Amazon states that its aim is to improve product selection and help advertisers improve their ads according to clients’ preferences. Amazon may also offer this information to brands, so they can receive feedback on their products.
11. Amazon in the World:
Turkey: Amazon launched Prime in Turkey. Does that mean they’re getting closer to Israel?
>> Amazon Prime launches in Turkey
Sweden: Amazon.se is launched and offers over 150 million products
Sweden: Amazon announces the first Solar Energy farm outside the US
>> Amazon’s first operational wind farm in Europe delivers clean energy to Sweden
Australia: Amazon AU launches Amazon LaunchPad program, that’s available in several markets and aims to promote startups and entrepreneurs.
Germany: German warehouse workers chose to strike on Prime Day of all days. Strike organizers state that warehouse workers deserve better pay, conditions, and respect.
>> Amazon faces strikes in Germany on busy Prime Day
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See you next time,