Virus-fueled ordering surge wreaking havoc for Amazon
SEATTLE — Exploding Kittens, a game that bills itself as “a kitty-powered version of Russian roulette,” spent years ranked as one of the most popular card games on Amazon’s store. When the coronavirus pandemic hit, sales doubled each week as families looked for distractions while hunkering down.
But just as orders came flying in, Amazon began prioritizing products like toilet paper and hand sanitizer. The retailer stopped ordering Exploding Kittens, and the most popular version of the game soon fell out of stock. Tens of thousands of customers a day were searching for the product but couldn’t buy it.
The topsy-turvy nature of those sales points to the chaos behind the scenes of Amazon’s store.
Since the outbreak reached the United States, Amazon — a company built on the promise that people will always want more items, more quickly — has struggled to respond to a surge in orders. Its popular page featuring Deals of the Day, once a prominent feature, has been buried. The company is even trying to tamp down demand.
Amazon has had to adjust to sales growth in one month that usually would take years, said Guru Hariharan, whose company, CommerceIQ, advises large brands with their Amazon business.
“It is almost like a run on the bank,” he said, “when there is a rumor you can’t get your money out and everyone runs to the ATM.”
For consumers, the changes have generated confusion just as people have turned more than ever to online shopping to help protect themselves from the virus. The company tells customers that some products will arrive in weeks, rather than hours or days.
Adding to the confusion is that not every product is available to all shoppers. For some items, like toilet paper, Amazon has given priority to people with recurring orders. It has earmarked supplies for Amazon Fresh and Whole Foods delivery, which do not use Amazon’s main warehouses. With more demand for those grocery services than it can fulfill, it has started a waitlist for new customers.
Other items, like medical gloves and Purell, show up in searches but are largely available from Amazon’s warehouses to organizations like hospitals and local governments.
Amazon’s systems began buckling by midMarch. Orders were up almost 16% in just two weeks, according to market research firm Rakuten Intelligence, and attendance among workers at Amazon’s warehouses had fallen, making it more difficult to fulfill orders. In addition, Amazon, like other retailers, had trouble getting enough critical products. Amazon’s top executives had begun meeting almost daily, a group including Jeff Bezos, its chief executive; Jeff Wilke, who runs the consumer business; and Dave Clark, who heads operations.
On March 17, Amazon told suppliers to stop sending in many items so that it could prioritize having workers and drivers handle household staples, medical supplies and other “high demand” products.
A different team at Amazon worked on another change: showing customers that products deemed to be a low priority would take many weeks to arrive.
Amazon knows shoppers are sensitive to exacting and quick delivery times. Almost a year ago, when it began investing billions of dollars to move from two-day shipping to next-day delivery, the growth in the numbers of items people bought on Amazon doubled within just months.
By showing long delivery estimates, Amazon would have more flexibility to fulfill orders and would suppress demand.