Amazon Puts Off Prime Day To Autumn -- WSJ
May 22 2020 - 3:02AM
Dow Jones News
By Dana Mattioli
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 22, 2020).
Amazon.com Inc. is taking a number of steps to return to
pre-pandemic business operations, including scheduling its annual
Prime Day shopping promotion for the fall and allowing unlimited
shipments of nonessential goods to warehouses, according to people
familiar with the matter.
The latter move will allow the e-commerce giant to lay the
groundwork for shipments of a wider variety of products, the people
said. It indicates that the company is now in a position to process
orders more quickly in its warehouses and create room for more
inventory, the people said.
Yet even as Amazon moves to return to wider product selection
and speedier deliveries, the company may not be able to reach the
ultrafast shipping times it had provided to customers for months,
the people said.
Amazon.com is inching toward a return to normal operations as
the company struggles to fulfill unprecedented demand because of
the coronavirus, upending operations and shipping speeds that
customers had grown used to.
The Seattle-based company this week decided to hold its annual
Prime Day event in September, according to people familiar with the
matter. The two-day sales event, which features deeply discounted
merchandise, has typically been held in July. But strains on the
company's warehouses due to surging demand caused Amazon to
postpone the event, the people said.
Amazon has seen fierce competition during the pandemic. While
company revenues in the first quarter were bolstered by demand from
surging orders, higher costs due to a wave of hiring, hazard pay
and shipping costs crimped profits. Amazon's net income fell 29%
from the year-earlier period and the company missed its earnings
targets.
Walmart Inc., by contrast, posted a 4% increase in earnings
while experiencing a 74% increase in online shopping for the
quarter. One advantage for Walmart is that its stores offer
curbside pickup for online orders, a more inexpensive form of
fulfillment compared to some Amazon shipments.
Last week, Amazon began allowing its third-party sellers of
items unrelated to the coronavirus to ship inventory to its
warehouses without caps on how much inventory they send, according
to one of the people.
In March, Amazon decided to prioritize at its warehouses items
deemed essential during the coronavirus outbreak, such as cleaning
products, health-care items and shelf-stable food. Amazon stopped
accepting shipments of items from sellers that didn't correspond to
the shopping needs of consumers hunkering down during the
pandemic.
Last month, the Journal reported that Amazon was allowing
sellers to again ship those items to its warehouses, but with
limits on how much they could ship to ensure there was warehouse
space for essential goods. As of last week, those limits were
removed, but the company didn't announce the decision in the event
of future operational issues that could cause them to reinstate
those limits, one of the people said.
"We removed quantity limits on products our suppliers can send
to our fulfillment centers," an Amazon spokeswoman confirmed. "We
continue to adhere to extensive health and safety measures to
protect our associates as they pick, pack and ship products to
customers, and are improving delivery speeds across our store," she
added.
While shipping speeds from Amazon's warehouses have improved,
the company hasn't reinstated one-day shipping for many Prime
orders. An Amazon spokeswoman said one-day shipping has been scaled
back, but the company is returning more items to one-day delivery
each week.
In March and April, many items such as hand sanitizer and toilet
paper were out of stock in some areas, and shipping times for
certain products were estimated to take as much as a month. One
primary factor in Amazon's challenges was that some employees
didn't come to work, leaving warehouses with fewer people to
process a major surge in orders, according to a Wall Street Journal
review.
Yet Amazon shipping speeds on average began to improve in April,
according to data from Rakuten Intelligence. The average delivery
time from click to door reached more than six days in late March
for some items, although that began to shrink in April. During the
week of April 13, the average click-to-door time for Amazon
packages was about three days, according to the data.
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Write to Dana Mattioli at dana.mattioli@wsj.com
(END) Dow Jones Newswires
May 22, 2020 02:47 ET (06:47 GMT)
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