Amazon

Holiday Push Will Test Amazon Expansion Strategy

Amazon

With the holiday season coming, Amazon is on track to face big challenges with shipping as the unprecedented demand of the pandemic continues, the Financial Times (FT) writes.

The eCommerce giant was already planning an expansion strategy, which the COVID-19 pandemic accelerated heavily.

Now, according to Chief Financial Officer Brian Olsavsky, the company has "run out of space."

The company increased its logistics footprint 50 percent globally between 2018 and 2019, alongside adding more warehouse space, sorting centers and distribution hubs to outpace rival efforts. Now, with the Christmas shopping season set to begin, the next few weeks will be a "litmus test" for Amazon's wildfire revenue growth, the news outlet reported. And with the pandemic still ongoing, people will likely be depending even more on Amazon rather than going out in person.

In addition, Amazon Prime Day on Oct. 13 was looked at by analysts as a way to gauge how many people were buying online and how the pandemic had shifted their habits from years previous.

The pandemic did enable Amazon to boost its workforce even more. CoStar consultant Juan Arias told the Financial Times the pandemic had made it hard for companies to hire people in fast-growing cargo handling regions. That, he said, made it easy for Amazon to have the upper hand again due to its massive size.

Amazon has also been trying to reduce reliance on third parties in getting items to customers quickly. It has done that largely from its Amazon Air airline, which has seen a 30 percent growth during the pandemic, with 54 planes in regular use in the U.S. flying about three times a day, with four more planes soon to be added as well.

A recent PYMNTS report chronicles how everyone is spending their time inside with the pandemic, which includes a much higher use of digital connected devices to perform everyday activities. Online shopping has seen a huge surge, with 37.6 percent of consumers utilizing devices to do that, as opposed to 18 percent last year.

——————————

WATCH LIVE: HOW WE SHOP – TUESDAY, NOVEMBER 10, 2020 – 12:00 PM (ET)

New forms of alternative credit and point-of-sale (POS) lending options like ‘buy now, pay later’ (BNPL) leverage the growing influence of payments choice on customer loyalty. Nearly 60 percent of consumers say such digital options now influence where and how they shop—especially touchless payments and robust, well-crafted ecommerce checkouts—so, merchants have a clear mandate: understand what has changed and adjust accordingly. Join PYMNTS CEO Karen Webster together with PayPal’s Greg Lisiewski, BigCommerce’s Mark Rosales, and Adore Me’s Camille Kress as they spotlight key findings from the new PYMNTS-PayPal study, “How We Shop” and map out faster, better pathways to a stronger recovery.

TRENDING RIGHT NOW