The Future of Amazon: How COVID-19 has Validated the Business Model

DUBLIN, Sept. 22, 2020 /PRNewswire/ -- The "Amazon 2020 - The Red Cross for the New Normal?" report has been added to ResearchAndMarkets.com's offering.

Currently there is a broad consensus that Amazon will emerge as one of the winners of the pandemic, however this report examines the overall picture.

COVID-19 has undoubtedly been positive for Amazon on a number of issues, of which the most salient could be characterised as a change in public perception, a change in shopping behaviour towards online and a vindication of Amazon's technological innovations and their future potential.

In the words of one consultant, Amazon is suddenly perceived as the new Red Cross by the public, as an essential service and real lifesaver for those in self-isolation and quarantine. What has helped Amazon is changed shopping behaviour from the stay at home society. It is safe to assume that shoppers will be likely to go out less even when restrictions are lifted. This will mean a greater push for online shopping and especially for online grocery.

A number of Amazon's big bets in technological innovations look much better now than just a few months ago. The Amazon Go stores are almost designed for the COVID-19 shopper. The concept of no queues, no touch payments are the ideal store prototype for the COVID-19 era. Moreover, one of the big drawbacks of the Amazon Go solution, namely that every SKU was being packaged in plastic (to be machine-readable) suddenly turns into a plus, as plastics are seen as more hygienic and safe than loose produce.

The same point about the potential of Amazon's bold tech bets in this new era also hold for drone delivery and push for robotic measures of all types, because these will be ideal for social distancing and guarantee business continuity. Alexa should benefit from the effects of the pandemic. Touch free, voice activated devices might get a huge push, as sound activation is clearly more hygienic than touch activation. Alexa has also acted as a household help during the crisis as a source of information on the Coronavirus, often in collaboration with local health authorities.

The pandemic has also led to increased sign ups to prime (mainly for deliveries benefits, but shoppers are also using much more of prime music and video, or twitch). For Amazon, the investment in moving to 1 day deliveries and the physical infrastructure (from new warehouses and sort centres closer to cities to proprietary Amazon Logistics) associated with it really has paid off. This has meant that Amazon has been able to cope better with the sudden peak, than it would have otherwise, even though delivery times in the USA topped 4 days in some instances, showing there is more to do on this front.

And when prime grows, Amazon grows. The company has stressed that the digital prime benefits really come into their own now (due to increased usage patterns), and the ROI in video and music content and Twitch for that matter is getting better by the minute, as people now engage much more.

Key Topics Covered:

1. Executive summary: Amazon 2020

2. Recent key developments

3. Data

• Data and KPIs: Net Sales & Income, Margin 2009-19, adding $47.6bn in 2019
• Data and KPIs: Net Sales & Income, Margin 2009-19, Analysis
• Data and KPIs: US, international, AWS sales, in $m, % split, growth, 2013-2019
• Data and KPIs: US, international, AWS sales, Analysis

4. Revenues, Financials, KPIs, Benchmarks in Amazon geographies

• Data and KPIs: International sales by country, in $m, % split, growth, 2008-2018
• Data and KPIs: New markets United Arab Emirates, Singapore

5. Active customer accounts per Amazon geography and annual basket spend

• Data and KPIs: Active customer accounts in m, by country 2009-19, growth
• Data and KPIs: Active customer accounts, Analysis
• Data and KPIs: Average annual spend per country 2011-19 in local currency
• Data and KPIs: Average annual spend 2011 - 19e on AMZN 1P, Analysis

6. Marketplace

• Data: Net sales by geography, average price, total units, customers, frequency 2019
• Data: Average price, total units, customers, frequency per country, Analysis
• Data: 3P share of GMV in % 1999-2018
• Data: 1P sales in US$m, 3P sales, % splits, GMV 2014-2019
• Data: Amazon GMV in 2019, Analysis

7. Prime

• Data and KPIs: The Prime Universe
• Data and KPIs: Prime account holders in m per country 2009-19
• Prime: The all-you-can-eat, physical-digital hybrid
• Prime: Prime: more successful at getting customers to cross shop than any other initiative
• Prime: Most successful tool to get buy-in to new categories, net costs, uplifts
• Prime: The 7 key prime benefits to Amazon
• Prime: Prime fee income 2019 in US$m, USA, Germany, Japan, UK, France, other
• Prime: Reconciliation Prime fee income 2015-19 with reported AMZN stats

8. Outlook

9. Sources

Companies Mentioned

• Amazon
• Canvas Technology
• Deliveroo
• Dematic
• DHL
• eBay
• Feneberg
• Ikea
• Morrisons
• Twitch
• Whole Foods

For more information about this report visit https://www.researchandmarkets.com/r/rczop1

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SOURCE Research and Markets