Amazon Tracker: May Flowers

It’s been another strong few weeks for Amazon (AMZN) as shares hit an all-time high at the end of April amid a major Q1 beat.

For the quarter, Amazon reported revenue of $35.7 billion, up 23 percent year on year and beating analyst estimates of $35.3 billion. Likewise, earnings per share (EPS) and net income hit well above expectations, with the online retail giant raking in $1.48 EPS and netting $724 million, up 41 percent year on year.

These numbers led AMZN to close out the month of April on a high note, hitting $948.23 on the first of May. The following week tempered the rise somewhat, with shares falling to close down 1.6 percent at $932.75 last Friday (though still well above year-to-date numbers).

On Monday’s opening bell, AMZN was up 0.85 percent to $942.06, rising to hit $946.04 at the time of writing Monday afternoon. A few more beats in upcoming quarters, and Amazon might just reach that $1,000 milestone before the year is up.

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One area (of many) where Amazon looks to grow quickly is in the online sale of apparel.

Clothing sales have historically lagged behind other consumer items online. This has largely been attributed to the fact that fit is hard to gauge online. Recently, however, stock research firm Cowen and Company found that consumers now buy 21 percent of wearable items via online channels.

And when you’re talking about online shopping, you’re almost certainly talking about Amazon. The company earned some $0.43 for every dollar spent online last year.

The online retail giant is already a major contender in online apparel sales among millennials. Amazon has been building out its private-label offerings for apparel since at least the end of 2015.

Earlier this year, Amazon looked to be preparing to launch its own line of workout clothes. And last month, the company announced it had won a patent for an on-demand clothing manufacturing system.

With this technology, Amazon looks to cut and assemble fabrics via textile printers and alter clothes via camera images. The process has the potential to scrap fit-related concerns when buying online and to feed consumers’ seemingly insatiable need both for personalization, customization and on-demand services both online and offline.

As PYMNTS’ Karen Webster recently wrote, apparel is one segment among many which are rapidly moving online, part of Amazon’s long-game plan to redefine what it means to be an omnichannel retailer.

In Germany, the company’s second largest market, Amazon recently launched AmazonFresh grocery delivery for Prime members following last week’s news that Deutsche Post DHL will act as the exclusive delivery supplier.

Deliveries will begin in Berlin and neighboring Potsdam, AmazonFresh Germany director Florian Baumgartner told Reuters, with expansions of the service into more cities the nation of 80 million to come based on results and consumer feedback.

Amazon could have a tough time drumming up buyers for online grocery sales in Germany.

In general, food and beverage sales have lagged behind other segments in terms of eCommerce adoption. Fewer than 2 percent of category sales took place via online channels in 2016 in the U.S.

In Germany, management consulting firm A.T. Kearney pegs online grocery sales at 1 percent currently, anticipating growth to 3 percent by 2020.

Given the high density of grocery stores per capita and lack of digital investments from incumbent grocers, German consumers don’t have much in the way of existing incentive to turn to digital channels for food and beverage purchases. For the moment, at least.

But Amazon has a habit of shaking things up when it enters new markets, and Germany is already primed to buy Amazon in other segments.

With Germany’s second largest supermarket REWE pouring money into online sales to stay ahead of Amazon, perhaps the added investments and competition for market share will be enough stir up adoption of online food and beverage sales.

The situation is arguably similar in Australia, where Amazon recently announced it is launching local operations, including AmazonFresh and AmazonGo. Research from Australian market research company Roy Morgan suggested some 3 percent of Australians regularly shop for groceries online, according to News.com.au.

“Shopping for groceries online still remains niche in Australia,” Morgan was quoted as saying. “The question is, will the introduction of high-speed grocery delivery service AmazonFresh change that?”

Elsewhere in the ecosystem, Amazon is gearing up to double its storage capacity in India in 2017 over last year by adding seven new fulfillment centers and some 4,000 new jobs by the end of June.

The move comes as part of the online retail giant’s rapid and aggressive expansion of operations in the nation of over 1.3 billion. Amazon has invested over $5 billion to gain market share in India and then some toward international market entries in Australia and Southeast Asia.

The investments likely contributed to a four-times increase to $481 million in operating losses in Amazon’s international segment in Q1.

In the company’s earnings call, CEO Jeff Bezos spoke to Amazon’s continued push into India, noting that the online retail giant’s India team increased Prime selection by 75 percent since launching in 2016 and had already increased fulfillment capacity by 26 percent this year to date.