Amazon Is Preparing for the Holiday Shopping Surge
Amazon is preparing for the expected holiday shopping surge.
“We want to control our own destiny,” said Brian Olsavsky, Chief Financial Officer at Amazon.com Inc.
Olsavsky is referring to the online retailer’s ability to prepare for the massive shopping spree that will occur over the next few weeks. Amazon has already leased over 40 planes and is buying more delivery trucks.
Wholly 93% of all online experiences begin with search engines and nowadays, especially around the holidays, many of those searches end up directing users to Amazon’s website.
According to The Wall Street Journal, Amazon is fighting to lower the shipping costs that will likely get much higher because of the expected fast delivery this holiday season along with higher volumes of items.
Amazon’s stock was down more than five percent in late October after announcing plans to increase spending on its fourth quarter shipping. They also stated that they were opening more warehouses, plan on investing in other ventures including streaming services, and want to improve their grocery shopping services.
“Grocery is a massive market opportunity for them,” said R.W. Baird, an analyst at Colin Sebastian. “It’s a notoriously tough business with low margins, since it’s expensive to store and transport produce. But Amazon has spent years ironing out the kinks with its delivery service.”
The company has planned on expanding its grocery delivery option since 2007 and they have now marked out plans to attempt to revolutionize the $650 billion industry.
CBS DFW reports that Amazon recently lowered its $299 annual Amazon Prime membership fee to a $99-a-year Amazon Prime loyalty program.
Although Amazon is taking many precautions when it comes to its services over the next month and a half, company officials are still optimistic.
“We feel very confident,” Olsavsky added, “we’re looking forward to a great holiday.”
Amasio Prime saves users plenty of costs on shipping fees, the company still charges for some specific deliveries. They do this so shipping revenues for this holiday season (and fourth quarter) will increase and help recoup some of the money lost from extra preparation.
Amazon earned $2.15 billion over the third quarter.