Is Amazon facing a crossroads with the coronavirus pandemic?
Amazon.com is reportedly delaying Prime Day 2020, typically held in July, at least until August as it faces extraordinary demand created by COVID-19.
According to meeting notes acquired by media outlets, Amazon also expects a $100 million hit from its excess inventory of devices that now it will now have to sell at a discount.
The supply chain strains were evident on March 16 when Amazon announced it would hire 100,000 workers in the U.S. and temporarily lift pay by $2.00 an hour. On March 17, Amazon said it would no longer accept any non-essential goods at its warehouses amid challenges keeping essentials in stock.
Currently, Prime deliveries for essential in-stock items are showing six-day delivery windows, with some products, such as hand sanitizer, still out of stock. Delivery dates for non-essential items range from three weeks to mid-June. While consumers are believed to be forgiving now, their patience may lessen in coming weeks.
Amazon’s biggest challenge, however, may be appeasing its warehouse and delivery workers. Coronavirus cases have been reported at more than 20 of the company’s U.S. warehouses. Employees told The Wall Street Journal in an article published on March 31 that about half the workers in some distribution centers “in recent days” are out due to health concerns.
An internal memo attained by the WSJ said Amazon had made more than 100 significant changes to human resources and operations over the past few weeks to deal with the business surge and workplace conditions. Beyond higher pay, Amazon has upgraded sick days and paid time off policies. Last Thursday, Amazon announced it would make millions of masks available and check temperatures at all warehouses. The company is analyzing camera feeds with machine learning to ensure workers are keeping adequately apart.
Analysts expect Amazon to gain significant market share with competitors forced to temporarily close doors, although the retailer’s top executives recognize the many execution challenges they face. The Journal wrote, “Senior executives are aware that Amazon’s response will shape public opinion about the company for years to come, according to people familiar with their perspectives. That is true both among consumers and in Washington, where antitrust investigations of the company are continuing.”
- Amazon’s COVID-19 blog: daily updates on how we’re addressing the crisis – Amazon.com
- Amazon ramps hiring, opening 100,000 new roles to support people relying on Amazon’s service in this stressful time – Amazon.com
- Temporarily prioritizing products coming into our fulfillment centers – Amazon.com
- Yotpo Survey of Consumers Pinpoints Changing Online Shopping Behaviors and Priorities Amidst Global Coronavirus Crisis – Yotpo
- Amazon Warehouses Will Now Accept Essential Supplies Only – Wired
- Exclusive: Amazon to delay Prime Day event due to coronavirus, outlines cloud risks – Reuters
- Amazon Is Reportedly Delaying Prime Day Until August Due to COVID-19 – Adweek
- Amazon is delaying Prime Day, its giant shopping extravaganza, until at least August – Business Insider
- Amazon Struggles to Find Its Coronavirus Footing. ‘It’s a Time of Great Stress.’ – The Wall Street Journal
- Amazon faces unprecedented challenges as dozens of warehouses grapple with COVID-19 outbreaks – GeekWire
- Amazon has been the king of big tech stocks during the coronavirus sell-off – CNBC
- Factbox: Coronavirus Cases Reported at 19 of Amazon’s U.S. Warehouses – The New York Times
DISCUSSION QUESTIONS: Is Amazon facing a make-or-break period based on how it executes amid the pandemic? What will define the company’s success?