Amazon Consolidates its Tech Behemoth Title Raking $70B Sales; Promises One-Day Delivery for Prime Customers
Multi-technology provider and retain giant, Amazon has announced the Q3 2019 Sales figures. It stood at $70 billion, growing the net sales by 24%, compared with $56.6 billion in third-quarter 2018. Amazon dominates the Retail, Cloud, Data storage and Voice commerce segments in the tech industry. Recently, Amazon also announced the acquisition of eHealth startup- Health Navigator – all these augurs well for Amazon partners and stakeholders.
One-Day Delivery on the Cards
For Jeff Bezos, CEO and Founder of Amazon, the Sales growth would be showcased in Prime’s 25th-anniversary-holiday celebrations. Jeff said, “We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery. Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year.”
Amazon dominated the retail ecosystem with highly connected shopping experiences built on analytics-based targeted Marketing campaigns. On the one-day delivery promise, Amazon CEO stated that it indeed is a big investment for the Company.
In the long-term, that’s the right thing to do for loyal customers, and for the environment. Jeff agreed that the delivery timeline could be counterintuitive but it’s now the need of the hour!
Jeff said, “(The) fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday.”
At the time of this announcement, Hugh Fletcher, Global Head of Consultancy and Innovation at Wunderman Thompson Commerce said, “While Amazon has seen its profit dip for another quarter, it is ultimately part of its long-term strategy to maintain its place at the top in the retail industry. As a fall in profits has been supplemented by its push for one-day delivery in North America, these short term investments have put it in a strong position against its competitors. Keeping its position as the benchmark for service is vital for Amazon, even if in the short term it affects its profits. In fact, 72% of customers in our recent survey said that they wished that all retailers and brands offered services as Amazon does. And, with 62% of customers wishing that they could buy all their products through one retailer, being number one in terms of service is vital to increase the probability that Amazon ends up as the one retailer that all consumers use.”
Hugh added, “Amazon has played a hand in conditioning the future shopper to expect quick delivery – something many of its rivals cannot compete with. In fact, a fifth of 6-16-year-olds will never buy from somewhere that can’t deliver the next day and 83% of children wish their purchases would arrive faster – so it has built the right foundations to continue its success with the next generation of shoppers. While its investment in infrastructure globally is proving costly, its dedication to staying ahead of its competitors will undoubtedly see Amazon leading the retail space for a long time.”
AdTech Boost Tops Revenue in ‘Other’ Category
Aaron Goldman, Chief Marketing Officer, 4C Insights , said, “The ‘Other’ category which is primarily comprised of advertising revenue was a bright spot in Amazon’s Q3 earnings announcement with 37% growth to $3 billion. Amazon is quickly ramping up its advertising platform and tapping into search marketing budgets. Amazon has the unique ability to close the loop from purchase intent to sales and allow brands use that data for ad targeting and measurement. Advertisers using 4C to manage their Amazon Advertising campaigns increased their spend by more than 250% year-over-year in Q3 2019 and we expect this growth to continue during the peak Q4 shopping season.”
Amazon is a trend-setter in every way
Steve Gershik, Chief Marketing Officier, inRiver said, “For product marketers and merchandisers, Amazon’s investment in improving deliverability raises the bar for everyone who sells online. Consumers expect a seamless and frictionless buying experience, and expectations will only increase as a result, even as Amazon sacrifices short term earnings for long term customer loyalty and increased average order value. In order to keep pace, brands need to focus on retaining loyalty by implementing an effective and profitable product experience, supported by accurate and consistent product information. Today, Amazon is the standard-setter for product information, quality, customer service, and logistics, but with competition fierce, adapting to changes in purchasing behavior with the current market is the only way to drive maximum engagement and revenue.”
Stock Prices versus Sales
Sophie Light Wilkinson, VP Marketing EMEA, Bazaarvoice has a candid message for Amazon and its partners. Sophie said, “It’s a difficult quarter for Amazon during which stock has fallen by 13.4% since its second-quarter earnings report in July. While Prime video and its advertising services continue to balance out what has become a very diverse portfolio of businesses beneath the Amazon brand, trouble endures at its very centerpiece, the marketplace. Discontent over fake reviews persists with Facebook embroiled in the facilitation of private groups designed to extract 5-star reviews from buyers duped into paying for “FREE!” product samples. It’s worrisome that such a large e-commerce platform has yet to cleanse itself of these bad actors, or offer a comprehensive product sampling option for sellers.”
Sophie added, “Other headlines about the marketplace have focused the conditions in its warehouses following recent high profile incidents of workers moving to unionize. With Black Friday encroaching, Amazon has ramped up PR efforts, including TV spots in the UK. The sudden arrival of ‘Twitter ambassadors’ from Amazon’s warehouses highlights its understanding of the wider view consumers now take when they buy from a retailer and the importance of authenticity.”
$70 Billion in Sales: Which Amazon Products Contributed the Most?
Expanded Alexa Portfolio
Amazon made Alexa now available in multiple languages across various countries. These include Portuguese for customers in Brazil, Spanish for customers in the U.S., and Hindi for customers in India. With Multilingual Mode, customers in multilingual households in the U.S., India, and Canada can switch between languages when talking to Alexa.
Amazon Echo Devices
Amazon’s newly launched Amazon Echo devices, in addition to Alexa and Echo Loop, brought the brand a massive customer base. Other products that made an impact include Echo Dot with clock, Echo Show 8, Echo Buds, Echo Flex, and Echo Studio.
Amazon kicked off the holiday season by announcing that more than 85,000 smart home products from over 9,500 unique brands can be controlled with Alexa. Powered by 100,000 skills for Alexa, including Education Technology skills made available through the new Alexa Education Skill API, Amazon is clearly the leader in Voice Commerce and Conversational AI market for commercial and domestic users.
Amazon also announced new Alexa smart home features and products. These include the Certified for Humans program and the all-new voice-controlled 4-in-1 Amazon Smart Oven.
Eero Mesh WiFi Systems
Amazon’s eero mesh Wifi system truly stands out in the market with its $99 price tag. eero is a mesh WiFi system that replaces your existing router and extends WiFi coverage seamlessly throughout your home. In addition, eero is expanding to Europe — customers in France, Germany, Italy, Spain, and the U.K. will be able to try the all-new eero and eero Pro in early November.
Retail tech numbers are toppling hard and fast. At the beginning of the year, Amazon was already leading in the retail tech space. Since then, the tech behemoth has only further consolidated its stance by developing 150 top-line tools and services for mid-size and SMBs. It has steadily translated into sales growth for Amazon stores. The retail utility model now includes Target Inventory Levels, Appstore, and third-party tools.
All these now help to sell partners to identify trusted third-party applications that complement Amazon’s free tools and help them streamline their business operations.
In-Vehicle Passenger Experience
General Motors (GM) announced plans to integrate Alexa into millions of vehicles across its four brands — Chevrolet, Buick, GMC, and Cadillac. GM is the first automaker to deliver a fully-embedded Alexa experience based on the Alexa Auto SDK, bringing Alexa to new and existing vehicles with compatible infotainment systems.
New Delivery Model for Prime and AmazonFresh
AmazonFresh has expanded to Indianapolis, Houston, Minneapolis, and Phoenix, with options for ultrafast one- and two-hour delivery. Customers in those cities can now shop from tens of thousands of grocery items, plus bestselling items from Amazon.com.
Amazon Fashion introduced Personal Shopper by Prime Wardrobe in the U.S., a new service exclusively for Prime members that provides style inspiration and personalized recommendations. Customers complete a survey about their style and fit preferences and Amazon Fashion’s stylist team provides personalized recommendations from over half a million items across thousands of brands.
Amazon Fashion continues to expand selection and customers can now shop from brands such as Rihanna’s Savage X Fenty, 3.1 Phillip Lim, Vince Camuto, and Tommy Hilfiger. Additionally, Amazon’s children’s brand, Spotted Zebra, launched its first exclusive collaboration with Disney, bringing unique and playful prints featuring Disney franchises — all for under $30.
Cloud Business Pushing Up the Bottomline Growth
AWS Lake Formation
AWS announced the general availability of AWS Lake Formation. Lake is a fully-managed service that makes it easier for customers to build, secure, and manage data lakes.
AWS Lake Formation simplifies and automates many of the complex manual steps usually required to create a data lake, including collecting, cleaning, and cataloging data and securely making that data available for analytics. Customers can then analyze this data using their choice of AWS analytics and Machine Learning services, including Amazon Redshift, Amazon Athena, and AWS Glue, with Amazon EMR, Amazon QuickSight, and Amazon SageMaker following in the next few months.
AWS announced the general availability of the Amazon Quantum Ledger Database (QLDB). QLDB is a fully-managed service that provides a high-performance, immutable, and cryptographically verifiable ledger for applications that need a central, trusted authority to provide a permanent and complete record of transactions across diverse industries. These include players from the retail, finance, manufacturing, insurance, and human resources.
AWS announced the general availability of G4 instances, a new graphics processing unit (GPU)-powered Amazon Elastic Compute Cloud (Amazon EC2) instance designed to help accelerate machine learning inference and graphics-intensive workloads, both of which are computationally demanding tasks that benefit from additional GPU acceleration. G4 instances provide the industry’s most cost-effective Machine Learning inference for applications, as well as a cost-effective service for building and running graphics-intensive applications, such as remote graphics workstations, video transcoding, photo-realistic design, and game streaming in the Cloud.
AWS announced the general availability of AWS IQ.
AWS IQ is a new service that helps customers quickly find, engage, and hire AWS-Certified third-party experts for on-demand project work. AWS IQ offers the tools and workspace for more secure collaboration, streamlined project tracking, and integrated billing.
Customers simply log into AWS IQ, describe their AWS-specific project needs in a few sentences to get started, chat with experts to clarify details of the project, compare proposals, review expert profiles, and select the expert that best fits their needs.
AWS announced the opening of the AWS Middle East (Bahrain) Region. Developers, startups, and enterprises, as well as government, education, and non-profit organizations can now run their applications and serve end-users from data centers located in the Middle East, as well as leverage advanced technologies from the world’s leading Cloud to drive innovation.
AWS now spans 69 Availability Zones within 22 geographic regions around the world and has announced plans for ten more Availability Zones and three more AWS Regions in Indonesia, Italy, and South Africa.
Price Drop in Amazon Elastic File System
Amazon dropped in-storage prices for Amazon Elastic File System (Amazon EFS) Infrequent Access (IA) storage class. EFS cost reduction is one of the largest percentage price reductions in AWS history.
AWS announced the general availability of Amazon Forecast, a fully managed service that uses Machine Learning to deliver highly accurate forecasts based on the same technology used by Amazon. Amazon Forecast builds precise forecasts for virtually any business condition — including product demand and sales, infrastructure requirements, energy needs, and staffing levels — with predictions that are up to 50% more accurate than traditional methods. Amazon Forecast is easy to use and does not require Machine Learning experience.