(Repost) Bloomberg -- Amazon Captured 29% of Online Orders Before Christmas


(Credit: Transcript by OpenAI Whisper)

Amazon captured 29% of online orders before Christmas. Amazon.com incorporated share of online orders spiked in the final days of the holiday shopping season, demonstrating how big investments in delivery speed paid off with procrastinating shoppers looking for a wide selection of products they could get quickly. Amazon captured 29% of global order volume in the final two weeks before Christmas, up from 21% the week of Thanksgiving and Black Friday, according to Route, a package tracking app that captured holiday season data from 55 million orders. It's a pretty sharp shift in how consumers shop, said Michael Yamartino, Roots' chief executive officer. The top priority in the days leading up to Christmas is on-time delivery, and when Amazon says it will take two days, it only takes two days. It's a combination of speed and confidence. Amazon CEO Andy Jassy has touted speedy delivery as a key competitive advantage, saying shoppers are more inclined to buy something if they get it quickly. The company's logistics prowess has become increasingly important amid rising competition from such stalwarts as Walmart Inc., as well as Chinese e-commerce upstarts like Taimu, Shine and TikTok, which offer steep discounts but can take a week or more to deliver packages. Read more, TikTok eyes $17.5 billion shopping business on Amazon's turf. Amazon in July announced plans to double the number of same-day delivery facilities in the coming years. The company said it reached its fastest-ever delivery speeds in the second quarter of 2023. Amazon currently operates more than 50 U.S. same-day facilities in the San Francisco Bay Area, Seattle, Miami, Boston and other big metro areas that ship about 200 million packages a year, according to MWPVL International Inc., which monitors the company's delivery operation. Amazon's fastest deliveries mostly benefit members of its Prime subscription program. About 70 percent of Prime orders in the U.S. arrive within two days, and almost one in four are delivered within a day, according to Consumer Intelligence Research Partners. Fewer than 15 percent of orders arrive that quickly for shoppers without Prime subscriptions, the Chicago-based firm said.

Key Takeaways from the Article:

  1. Amazon's Holiday Season Surge: Amazon.com Inc. experienced a significant increase in its share of online orders during the final two weeks before Christmas, capturing 29% of global order volume. This marked a notable rise from 21% during the week of Thanksgiving and Black Friday.

  2. Impact of Delivery Speed Investments: Amazon's substantial investments in delivery speed paid off, particularly with last-minute shoppers seeking a wide selection of quickly available products. The company's ability to ensure on-time delivery was a key factor in attracting customers.

  3. Consumer Behavior Shift: Michael Yamartino, CEO of Route, a package tracking app, highlighted a sharp shift in consumer shopping behavior, emphasizing the importance of speed and reliability in delivery services.

  4. Competitive Advantage of Speedy Delivery: Amazon CEO Andy Jassy has emphasized speedy delivery as a crucial competitive edge, noting that customers are more likely to purchase items if they are delivered quickly.

  5. Rising Competition: Amazon's logistics capabilities have become increasingly vital in the face of competition from established retailers like Walmart Inc. and emerging Chinese e-commerce platforms like Taimu, Shine, and TikTok, which offer discounts but longer delivery times.

  6. Expansion of Same-Day Delivery: In July, Amazon announced plans to double the number of its same-day delivery facilities in the coming years. The company achieved its fastest-ever delivery speeds in the second quarter of 2023.

  7. Scope of Same-Day Delivery Operations: Amazon operates over 50 same-day facilities in major U.S. metro areas, shipping about 200 million packages annually, according to MWPVL International Inc.

  8. Prime Membership Benefits: Amazon's Prime members benefit significantly from the company's delivery infrastructure, with about 70% of Prime orders in the U.S. arriving within two days and nearly a quarter within one day. In contrast, less than 15% of orders for non-Prime members are delivered that quickly.

The article underscores Amazon's strategic focus on delivery speed and efficiency, which has been crucial in capturing a significant share of the online retail market during the critical holiday shopping season.

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