Amazon not accepting change

Nation’s biggest online retailer working to win back lost customers

As millions more Americans turned to online shopping during the pandemic, Amazon struggled to keep up with the demand, and its rivals pounced.

Target’s online sales shot up 141% last quarter, and Walmart’s rose 74%. Etsy’s were up almost 80% in April.

Now Amazon is saying enough.

The company is shipping many more items in a day or two and is again running promotions. It has removed limits on the types of products in its warehouses. And while it has delayed its annual Prime Day, Amazon is preparing for an earlier “Summer Sale” to let brands sell excess inventory, according to an audio recording of an internal meeting discussing the promotion.

The changes position Amazon to recapture its customers who had fled elsewhere when the outbreak took hold.

“They eliminated their own competitive advantage they had built over 20 years,”

enough

is said John Ghiorso, who runs Orca Pacific, an agency that helps brands run their Amazon business. “Now they are getting it back pretty quickly.”

Amazon remains by far the country’s biggest online retailer. But the coronavirus put the tech giant on its heels. The surge of orders overwhelmed its operations, forcing the company to dampen demand and slow shipping on many items from a few days to almost a month.

While Amazon’s sales did boom, its competitors’ grew even more. Before the pandemic, orders to Amazon accounted for about 42% of online spending in the United States. By mid-April, that had fallen to 34%, according to data from Rakuten Intelligence, an analytics firm.

The biggest problem facing Amazon has been its fulfillment network, the 500 or so warehouses across the country that let Amazon house, pack and ship products to customers’ doors in two days or less. The efficiency of its network — and the speedy and reliable delivery it provided — is what separated Amazon from its competitors.

As the virus spread and Amazon’s response at times lagged, many workers stayed home, reducing how much product Amazon could handle. The company also struggled to keep popular panic-buying items, such as toilet paper, in stock.

Amazon is now unwinding the steps it took to throttle customer demand.

For more than a month, Amazon hid its Today’s Deals page, a heavily trafficked page that usually received prominent promotion on its website and app. It also limited the products sold on the page to things that could be downloaded, such as software, instead of shipped. About a week ago, the Deals page got its homesite placement back, and the variety of products widened.

Although it took longer than many employees wanted, Amazon put in place new safety measures in its warehouses. On May 1, it stopped allowing unlimited unpaid time off, bringing many nervous employees back to work. It also hired and trained 175,000 new employees. Before, trucks could wait days for someone to unload them; the extra hands let Amazon quickly replenish its warehouses.

Amazon “pushed the rabbit through the python,” said Eric Heller, a former Amazon senior manager who advises major brands at Wunderman Thompson Commerce. Now, he said, “It really feels very much back to normal.”

Kate Scarpa, an Amazon spokeswoman, said, “We know customers want their deliveries as quickly as possible, and we are working hard to return all products to faster delivery speeds while helping keep our employees safe.”