In coronavirus era, Amazon and other retailers can’t keep up
Jesse Rodriguez just wanted his weekly batch of groceries. And because his asthma makes the coronavirus pandemic especially dangerous for him, he didn’t want to mix with the crowds at a supermarket.
No big deal, the 59-yearold West L.A. legal assistant thought last Thursday – he’d use Amazon Prime.
But the service was swamped. It had no delivery times available for days, he recalled. So he tried shopping service Instacart, only to find that most items he wanted were out of stock. He ended up going to a market after all, gobsmacked by the unavailability of systems that have become so ingrained in everyday life.
“As Americans, we do get used to certain things,” Rodriguez said. “When it’s just nonexistent, it’s alarming.”
Amazon.com Inc. and other major retailers have spent years teaching Americans to order online and expect same-day or oneday deliveries. Now that the coronavirus outbreak has pushed people nationwide into their homes and away from crowds, online orders have surged, and the companies can’t keep up.
“Online usage has gone through the roof,” said
Brent Thill, an analyst with the investment firm Jefferies. “No one wants to go into a store, so the pressure on the e-commerce vendors is like nothing we’ve seen before. Your delivery wait times are going to be longer.”
At the top of the homepage of Amazon’s grocery site, which includes its
Amazon Fresh and Whole Foods Market units, there’s a warning: “Inventory and delivery may be temporarily unavailable due to increased demand. Confirm availability at checkout.”
Deliveries from Walmart.com, Target.com and other retailers also have slowed, and some customers are being mistakenly told that orders are being filled when in fact products are out of stock. Walmart’s homepage carries the notice that “NextDay delivery currently unavailable.”
Amazon accounts for 38% of all U.S. online retail sales, according to research firm EMarketer. More than 150 million people worldwide pay for an Amazon Prime membership ($119 a year, or $59 a year for students), which includes same-day or one-day delivery, but that benefit is being overwhelmed by the disruption, analysts said.
Amazon also said this week that it’s prioritizing shipments of medical supplies, household staples and other products that are in high demand due to the pandemic. Items deemed nonessential will have to wait.
The e-commerce giant told third-party merchants that use its platform – and that account for about 58% of all goods sold on its site – that it would stop accepting their shipments to its warehouses if their products weren’t on that priority list, at least through April 5.
Those merchants can still sell on Amazon but would be responsible for storing and shipping the goods themselves, a task for which many aren’t equipped. The result: Customers ordering certain electronics, toys, apparel and other goods on Amazon are looking at deliveries that could take days or more, even if those items already are sitting in Amazon’s warehouses.
“Even deliveries from Amazon Prime are not being delivered anywhere close to one or two days because not only is Amazon overwhelmed, but UPS, FedEx and all the last-mile delivery companies also are overwhelmed,” said Juozas Kaziukenas, founder of the research firm Marketplace Pulse.
“The whole supply chain in the country is being pushed to the limit because no one was expecting such an explosion of demand in the first quarter, because it never happens,” Kaziukenas said.
Many Americans are ordering groceries online for the first time due to the virus, and a significant number likely will keep doing so after the outbreak subsides, said Andrew Lipsman, retail analyst at EMarketer.
“This will lock in new behavior,” he said. “You’re going to see a meaningful percentage of consumer grocery orders permanently shift to digital channels, either to be picked up at the store or delivered to your home.”