Click here to download a pdf of the slides, Amazon Impacts of COVID-19 – Navzon Inc – April 28 2020.
Amazon continues to recover and adapt as the COVID-19 pandemic crisis begins to take a downturn in many ways.
Amazon Operations
This week, more than in recent weeks, Amazon has increased its purchase orders for companies with lower weeks of cover, which is helping them align their operations more with what customer demand shows.
Stay-at-home orders are relaxing in various regions, but many consumers are still buying from online stores, primarily Amazon. Consumers still have the largest confidence in their safety in shopping online.
To provide their services to lower-income families, some of those that need the most help in these times, Amazon has expanded their acceptance of SNAP payments to Amazon Fresh. This allows those families to use funds from government assistance to get food even in a quarantine environment. Prime has also been discounted for customers with an EBT or Medicaid card.
Some of Amazon’s brick-and-mortar stores are temporarily closed until May 16th, and looking at these stores can help give insight into Amazon’s internal operations and direction. However, they are still struggling to meet demands at fulfillment centers. They have offered additional pay for hourly workers until May 16th. They have mandated that employees that are not in high-risk categories must report to work or request leave, but some workers in New York are trying to organize a “walk out” on the same day, International Workers Day. This may risk more issues with operational issues Amazon is experiencing.
Internationally, Amazon has reached a record 22.3% proportion of online sales in March 2020 in the U.K. However, France has limited Amazon’s operations to a point that Amazon decided to stop their activity altogether in the country.
Difficulties and Opportunities for Vendors
Product suppressions continue, and vendors should keep an eye on any that happen so they can submit cases to get the product live again.
Many deliveries are still delayed, but that is becoming less common as operations continue to normalize in many aspects.
New drop ship account setup has been closed, so if you had not gotten your products on the direct fulfillment program, you’ll have to wait till it opens again. Activation for the Born-to-Run program is temporarily disabled, but activation can still be requested. New product purchasing is ramping up again, and if drop ship is already set up, it can be used to ramp even faster.
As for advertising, many search terms and products related to the crisis and survival have seen extremely high levels of searches, including food, disinfectants, home office, and more. Such products can take advantage of these with their content and keywords.
Future Operations
Forecasting estimated impact of virus to last until the end of May, and as quarantine policies begin to lift, expect online shopping demand to decrease. However, with the changes during the pandemic, expect the demand to be higher than before.
Amazon has made some of their own studies and forecasts, including that 20% of online grocery shoppers are doing so for the first time. They believe that one in ten people will be accustomed to buying groceries online by the end of the crisis. And many consumers believe they will continue to so much grocery shopping online afterward.
Even more changes and updates are looking to come for next week. Contact a Navazon representative if you need help traversing this crisis for your business.