Amazon and other retailers are under great pressure to prove that they have the ability to handle higher-than-average online orders under the double whips of the epidemic and holiday shopping spree. This year, more consumers are expected to buy gifts online than in previous years, which may mean that goods on virtual shelves are sold faster and freight capacity is increasingly strained.
Amazon is well prepared for the holiday season compared to the rush at the beginning of the year. The first months of the outbreak were by far the biggest test of Amazon's warehousing and delivery capabilities. The company tried to meet a lot of demand, but the surge in demand rarely broke its two-day delivery commitment.
Since then, Amazon has spent months perfecting its distribution and logistics systems to ensure that it runs smoothly during the holiday shopping season. The company has also increased transportation capacity, significantly increased the number of warehouse staff and increased the choice of goods in warehouses close to consumers.
Amazon has been actively expanding its warehouse to have more storage space for goods. So far this year, the company has added at least 75 new distribution centers, sorting centers, regional aviation hubs and distribution stations in the United States and Canada.
Amazon said it would recruit 100000 seasonal employees to meet the demand for this year's holiday shopping season. In the same period last year, Amazon employed 200000 casual workers. But since the outbreak, Amazon has been recruiting heavily. Between March and April, Amazon added 175000 new operations jobs; in September, it added another 100000 workers.
That means Amazon will be one of the few retailers that will stand the test of "Freight delays and chaos.". The so-called "Freight delays and chaos" means that major carriers will face a shortage of capacity during the holiday season.
"Amazon is a well-functioning machine ," explains Andrea Lee (Andrea Leigh), a former Amazon executive and vice president of strategy and analysis at the Ideoclick of ecommerce consultants ." They' re not going to fall down this holiday season ."
Even so, Amazon is likely to make some minor adjustments to ease the holiday season load.
Earlier this week, Amazon highlighted alternative distribution options that allow holiday shoppers to pick up packages from nearby physical retail stores and community "centers.". The company also launched an "Amazon day" service, which allows shoppers to receive all Amazon orders on one day instead of receiving different orders at different times of the week.
Some people believe that Amazon launched these measures to release part of its last mile delivery capacity during the holiday delivery peak. But Amazon denies that. The company said the services were designed to "provide consumers with more choices.".
Andrea Li said she also noticed that Amazon raised the booking pick-up fee when returning the goods. Now, Amazon first suggests that shoppers will return packages in Kohl's convenience stores, Amazon lockers, or UPS stores.
An Amazon spokesman denied that the company encouraged consumers to place returned packages elsewhere or increase the cost of booking for pickup.
"It's not true," the spokesman said. "Amazon offers consumers a variety of free, simple and convenient ways to return goods."
Andrea Li also said that Amazon might offer discounts to shoppers who choose "non-urgent delivery" at checkout, or check the option by default at checkout to subtly imply that shoppers choose "non-urgent delivery ". Amazon has set up banner ads on the checkout page to tell consumers that they can get a $3 discount if they are willing to wait a few more days for the order.
An Amazon spokesman did not answer specific questions about whether non expedited delivery is beneficial to the company's logistics network or whether Amazon day reduces transportation costs.
It is not clear whether consumers will really choose "non-urgent delivery ". Uzzas Kazukonas (Juozas Kaziukenas), Marketplace Pulse head of e-commerce research, believes that even if there is a discount, consumers "don't necessarily buy it ".
"Amazon can't get people to accept a week-long delivery because there are already a lot of people complaining about prime and not receiving the package within two days," kazukonas said. "If we extend the delivery time, people will only complain more and more."
If consumers are not willing to wait for the extra time, at least Amazon can transfer some of their demand to third-party sellers. According to reports, some businesses said that Amazon is already deploying this strategy.
One merchant, who asked for anonymity, said they had seen a surge in orders for goods to be delivered. The so-called merchant distribution of goods, that is, the seller manages the inventory and delivers goods directly to the buyer. An Amazon spokesman denied that the company had moved orders outside its distribution network.
"The patchwork is not necessarily true," the spokesman said. "Amazon has invested heavily in our distribution and logistics capabilities to deliver orders quickly this holiday season. We have not changed the way we provide services to consumers, nor have we passed on orders from Amazon to sellers."
As the holiday season draws to a close, Amazon can also use the tools it used during the outbreak to control demand. Between March and may, Amazon made a series of adjustments, including removing "daily deals" from its home page and suspending coupons and product recommendations.
"At the end of the fourth quarter, Amazon is likely to do the same thing again, because for Amazon, it's an effective way to manage the sales of its website." Kazukonas said.
But for Amazon, the real challenge is in mid December. At that time, major carriers UPS, FedEx and postal services will begin to implement holiday shopping deadlines. After December 15, these carriers will no longer guarantee that ground delivery orders will arrive before Christmas.
This is likely to lead to a large number of buyers who don't buy gifts in time, because Amazon is one of the few companies that can ensure that orders are delivered on time within 11 hours, thanks to the company's strong distribution team.
"For Amazon, December 16th is the real black Friday ," said James Thomson, a third-party seller consultant and former head of Amazon services ." It's going to be an unprecedented situation, not only because Christmas is coming, but also because it's a big year for online shopping, but because everyone else is relying on carriers to deliver goods, and carriers are clearly under pressure ."
Amazon still uses USPS, ups and FedEx to deliver some packages. But the company's internal logistics network, involving trucks, airplanes, distribution trucks and contracted distribution drivers, has taken on an increasing share of delivery.
Amazon said that in the United States and around the world, Amazon's logistics network delivers more than 50% of the total goods. The company's distribution team will play an important role in the holiday season as in previous years.