Whole Paycheck Report: Prime Day Speculation, Bezos Signs Off And Walmart Goes Electric

It’s springtime. With the events of last year’s pandemic terror still fresh in mind, it’s easy to forget there’s a major event to speculate about for Amazon watchers as the company bids for the whole U.S. paycheck. The event is Prime Day. Last year it was a moving target due to the pandemic, international pressures on Amazon’s Indian operations and last-mile challenges in the U.S. It ended up happening in early October 2020 and now it’s time to tee up Prime Day 2021.

The smart money for this year is on June, which would be closer to the company’s standard summertime shopping holiday. Recode is reporting that if Amazon does go ahead with its June plan, it will be a multi-day event and as usual will be exclusive to Prime members.

“It’s also unclear why the company would move the event slightly to June rather than keeping it in its normal July window,” Recode said. “One source speculated that the timing could be influenced by Wall Street. More specifically, Amazon execs may want to boost sales in the second quarter of the year to help with financial comparisons to the second quarter of 2020, when Amazon revenue grew an above-average 40 percent amid lockdown-fueled stock-up splurges.”

We agree on the date; disagree on the strategy. Amazon has never played to Wall Street and it’s doubtful that new CEO Andy Jassy would start now. The best reason for Amazon to place Prime Day in June has a lot to do with its new streaming property, the NFL. NFL training camps start in July. Last year, there were no NFL training camps due to the pandemic. In June the collective attention of sports fans is turning from basketball and mid-season baseball to football. Amazon will use Prime Day to feature NFL merchandise, its new NFL Prime package and maybe even some of its new relationships with NFL players. Main Street is the target audience for Prime Day; not Wall Street.

Bezos Signs Off

It won’t be the last we hear from Jeff Bezos when he hands over the reins to Andy Jassy. But we have read his last shareholder letter, released on Thursday (April 15). In the letter, Bezos wrote the company went from exceeding 1.5 million customer accounts at the time of his first shareholder’s letter in 1997 on “Day 1” — shortly after the company had gone public — to have over 200 million Prime members throughout the world.

The letter also detailed the tens of billions of dollars in value that Bezos says Amazon generates for shareholders, employees, third-party sellers and customers, while it also touched on job creation, worker safety and climate change. Bezos wrote that 60 percent of its retail sales come from the more than 1.9 million small and medium-sized businesses (SMBs) that now sell on its platform. He also added that the value creation for its Prime members works out to $630 each or a total in 2020 of $126 billion in value creation.

Bezos came to that dollar figure by calculating time savings at $10 per hour “which is conservative” and multiplying that by 75 hours and subtracting the cost of a Prime membership, per the letter. He also noted that customers have linked over 100 million smart home devices to Alexa, while Amazon Web Services wrapped up last year with a $50 billion annualized run rate.

The news comes as Bezos will be handing off chief executive responsibilities at the firm he built to Andy Jassy, the head of Amazon Web Services, and Bezos will be transitioning to the position of executive chairman beginning in Q3 of 2021.

“Andy is brilliant and has the highest of high standards. I guarantee you that Andy won’t let the universe make us typical. He will muster the energy needed to keep alive in us what makes us special. That won’t be easy, but it is critical. I also predict it will be satisfying and oftentimes fun,” Bezos wrote in the letter.

“In Amazon’s 1997 letter to shareholders, our first, I talked about our hope to create an ‘enduring franchise,’ one that would reinvent what it means to serve customers by unlocking the internet’s power,” he wrote. “I noted that Amazon had grown from having 158 employees to 614, and that we had surpassed 1.5 million customer accounts. We had just gone public at a split-adjusted stock price of $1.50 per share. I wrote that it was Day 1.”

Walmart Electrifies Its Last-Mile Delivery

Walmart’s big news of the week is its investment in San Francisco-based Cruise, which is working on an all-electric fleet of self-driving cars, according to a press release. Walmart said it has been looking into the role of autonomous vehicles in the past few years, saying that it has “seen enough to know it’s no longer a question of if they’ll be scaled, but when.”

The investment in Cruise will help Walmart toward its goal of a last-mile delivery ecosystem that is “fast, low-cost and scalable.” Walmart has been working with Cruise since last November on a delivery pilot in Scottsdale, Arizona.

Walmart said its focus on delivery comes as eCommerce has become a staple in the lives of customers amid the pandemic. The retailer also cited Cruise’s fleet being powered by 100 percent renewable energy, which will help Walmart achieve its goal to achieve zero emissions by 2040 and to be fully powered by renewable energy by 2035. In addition, the company is working with Project Gigaton, a large private-sector consortium for climate action, the release noted.

Walmart said its investment in Cruise “shows our commitment to bringing the benefit of self-driving cars to our customers and business. We’re excited to join Cruise’s already impressive partner and investor ecosystem with the likes of GM, Honda and Microsoft as we work toward pioneering this emerging technology,” the retailer added.

Cruise was also recently the recipient of funds from Microsoft, in a funding round that ended up netting Cruise $2 billion in equity funding and brought its valuation to $30 billion. Microsoft’s involvement was part of the tech giant’s strategic relationship with Cruise and GM to help power electric vehicles. Cruise will gain access to Microsoft’s cloud and edge computing platforms; in exchange, Microsoft will leverage Cruise’s expertise to boost its customer-driven product innovation. Microsoft will also become GM’s preferred cloud provider for digitization efforts.

“As delivery has become a staple in our customers’ lives, we’re focused on growing our last mile ecosystem in a way that’s beneficial for everyone — customers, business and the planet,” said the company’s blog. “With their all-electric fleet powered by 100% renewable energy, Cruise is a natural partner as we work to take collective action on climate change. We’re doing this not only in our own operations where we are targeting zero emissions by 2040 and have set a goal to be powered by 100% renewable energy by 2035, but also throughout the supply chain and our environmental initiative, Project Gigaton, one of the largest private sector consortiums for climate action.”