Can Sustainable Carts and a Second Prime Day Turn Amazon’s Fortunes Around?

Amazon has been riding high as the undisputed king of the ecommerce castle for quite some time now and has seen nothing but growth since founder Jeff Bezos first started selling books online from his Bellevue, Washington garage in 1994.

However, multiple factors such as the COVID-19 pandemic, the supply chain crunch, inflation, and now the UK cost-of-living crisis have conspired to harm Amazon’s ability to deliver its core ecommerce mission, resulting in a steep dive in online sales growth and its share price falling by a third in 2022.

(Image source: Financial Times)

"This poor retail performance has seen Amazon backtrack on its aggressive logistics expansion plans,” reports the Financial Times. "It has closed, or cancelled opening, at least 50 facilities in the US, according to data from logistics analyst Marc Wulfraat. It has eased off the permanent hiring of corporate and frontline staff just months after warning that a shortage of willing and able warehouse workers was one of its biggest challenges.”

However, never one to stop moving forwards, Amazon has started putting plans in effect it hopes will reverse these fortunes and get that line moving back in the right direction.

Prime Day

The first of these initiatives revolves around boosting membership of Amazon’s premium subscription package, Prime is an already saturated market and retaining existing subscribers by increasing the sense of value they get from being members. This is in the wake of a sizeable portion of these members having their subscription cost rise by more than 40% in a single year.

Prime Day is a yearly sales event, where members can access a multitude of deals on a range of products from Amazon’s extensive catalogue and the retail colossus is seeking to make lightning strike twice by adding an extra date to the event calendar. The first Prime Day 2 occurred in November 2022 – a strange choice given the obvious competition with Black Friday – and, at time of writing, we are still waiting to see whether it was a success or not.

Prime has been increasingly trying to keep hold of an increasingly fickle subscriber base by investing significant volumes of money into high concept shows such as The Lord of the Rings: The Rings of Power which cost Amazon a reported $1bn to acquire rights and put into production and was met with mixed reviews on release of its first season. Households hold on average two subscriptions at any one time and with so many other options out there, platform providers need to ensure they are delivering value and a high-quality product offering.

Sustainability

Amazon has also been taking notice of criticisms it has received for its green credentials and is making its delivery network in the UK more sustainable with the launch of its first micro-mobility hub for more environmentally friendly logistics in the country.

The fleet of e-cargo bikes and walkers provided by the hub will replace thousands of van trips on the roads of the nation’s capital and help reduce congestion and emissions. Amazon’s intentions are for the hub to make more than one million customer deliveries every year, with plans for more to be rolled out across the country over the coming months and years.

"Amazon has over 1,000 electric delivery vans on the road in the UK, and last year helped the company deliver more than 45 million packages,” said the company in a press statement. "Its fleet of zero emission vehicles will expand further as more e-cargo delivery hubs are expected to launch across UK in the coming months. Amazon also recently announced five new fully electric Heavy Goods Vehicles. These 37-tonne vehicles are among the first in the UK, the first in Amazon’s fleet, and replace traditional diesel trucks.”

With customers becoming increasingly conscious about the environmental impact of the businesses they choose to spend their money with, you can bet Amazon is hoping these moves will raise its profile among this cohort and lead to a further increase in orders.

"Amazon is driving towards a global net-zero carbon future. One way we’re doing that is through the transformation of our transportation networks,” said UK Country Manager, John Boumphrey. "Our new e-cargo bikes, walkers, and growing electric vehicle delivery fleet will help us make more zero emission customer deliveries than ever before across London and the UK in the coming months.”

Final Thoughts

Despite its drop in sales, Amazon is still the champion of ecommerce, and it seems highly likely that these initiatives and others will help the company improve its figures and regain the ground it has lost since the end of the pandemic.

The latest developments at Amazon are always part of the conversation at eTail UK 2023, being held in April, at the QEII Conference Centre, London, UK.

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