Monthly Amazon Update – April 2020

Amazon is postponing Prime Day, its annual main shopping event of the year, until at least August 2020. It is expected to incur a $100 million loss from unsold devices. Link

According to the German Federal Association for E-Commerce and Mail Order Business (bevh), revenues from online commerce in March fell by 18 percent compared to the previous year. The Corona crisis has led to fewer purchases in the entire retail sector, so the claim that “e-commerce will emerge as a winner from the Corona pandemic” is regarded as simply false. In the clothing sector, sales in March fell by more than 35%, consumer electronics by almost 21%, and even computers and accessories recorded a 22.7% decline despite increased home office solutions. Link

Amazon again allows sellers to sell non-essential products: Since mid-April, essential products are again less prioritized at Amazon and FBA sellers can send their goods to Amazon warehouses again. Link

After Amazon US stated that it had increased its online food capacity by 60%, this capacity increase seems to be insufficient. The Amazon Fresh and Whole Foods delivery services have suspended new customer registrations due to high demand. Link

In order to possibly test all employees for the corona virus in the future, Amazon is setting up its own testing laboratory in the USA. Employees from different departments have already started to assemble equipment in order to be able to test a smaller number of employees from the front line soon. Temperature measurements and the distribution of face masks were already introduced as measures in the previous week. Link

After already creating 100,000 new jobs in warehouses and delivery services last month, Amazon plans to hire another 75,000 workers. These additional workers would be needed due to the increase in orders resulting from the Corona crisis. Workers are to receive higher wages by the end of April: an increase of 2 US dollars per hour in the USA and 2 pounds or euros in the UK and Europe is planned. Link

Following a French court ruling that allows Amazon to deliver only essential products, Amazon in France continues to stand still. The closure of the warehouses, originally scheduled until May 5th, to assess work-related risks of workers in all warehouses during the Corona pandemic, continues.

Amazon is cancelling promotions to sell less: With orders almost overwhelming, Amazon is expected to cut Mother’s Day and Father’s Day promotions this year. In addition, the widget on the US site, which shows customers similar products that other customers have bought, has been removed. Link

In order to draw attention to the health safety abuses in Amazon warehouses and to demand better protection measures, more than 300 workers from about 50 facilities protested in America. The protestors are demanding the closure of all Amazon facilities that have confirmed corona cases and that workers be provided with tests and two weeks’ pay during this period. Link

Amazon Germany boss Ralf Kleber sees the online industry as having a responsibility: “By trading online, some customers stay at home and help to flatten the infection curve. He also warns against seeing Amazon only as a beneficiary of the crisis: Even if there is now an increased demand, the crisis is far from over and in the long run nobody will profit from it. Link

Under the “Local Shops on Amazon” program, local food retailers in India can offer their goods via the e-commerce platform. The program, which has been in its pilot phase with 5000 suppliers in the last 6 months, is now being formally launched with increased demand due to the Corona crisis. Amazon is investing 1.3 million US dollars in the initiative. Link

Amazon’s quarterly figures for the first quarter of 2020 published on April 30th were high as expected: due to booming internet trade sales, revenue rose by 26% to 75.5 billion dollars in comparison with the same period last year. However, high expenditures such as the mass hiring are depressing quarterly profits by 30% to USD 2.5 billion. For the current quarter, Amazon warned of extraordinary costs of 4 billion euros which the company intends to invest in its supply logistics and in measures to protect employees. Link

According to reports from Amazon employees, third-party data was used to make decisions about prices and assortment of own brands. Amazon had denied this in the past and, according to the Wall Street Journal, has now launched an internal investigation. Link