The world continues to see the unprecedented effects of the coronavirus pandemic with lockdowns of citizens and companies across entire cities. The closing of stores, in particular, has been a challenge every business owner and citizen has had to deal with.
This challenge, however, has also led to a very profitable situation for the people at Amazon (AMZN) whose two-day delivery has been an incredibly powerful ally in maintaining social distancing and staying indoors.
Amazon isn’t only going to do well during these lockdown periods. Amazon has grown throughout the years because they offer a service that is the epitome of convenience. Couple that with this pandemic and you have the perfect storm of Prime volume and new customer acquisition.
Amazon has stated they will be hiring 100,000+ new people to keep up with this increase in volume. They have also stated they will be providing Prime’s 2-day delivery option on essential goods but there may be delays in some due to the current circumstances.
Amazon has also claimed that nonessential goods will have to take second place to essential orders because that’s the only sensible thing to do, really. Amazon really has acted responsibly and decisively to respond to this crisis.
Most people don’t realize the strain these shutdowns have, not only on our businesses and cities, but also on the logistical systems in place to distribute food, medication and other goods across the country. Amazon has really stepped into a position where they not only solved a massive issue facing society, but they also did it quickly. They did this ethically as well, reviewing the quality of the products being offered and combatting price gauging among their sellers.
This situation isn’t’ all roses for Amazon. The essential goods they’re focused on delivering generally have smaller margins and with increased labor costs, Amazon will probably see a smaller percentage of profits. In addition, other sectors might take a hit, like their AWS division, as companies scale back their expenses in cloud computing.
Despite the contraction in some areas, make no mistake, this will be a positive thing for Amazon. People will start to use Prime more frequently and for more of their needs even after this entire situation is over.