Amazon showed its direction of travel was firmly towards fast delivery, voice commerce and boosting membership of its Prime subscription club when it reported second quarter results recently. Here we explore what the retailer’s latest figures had to say about those themes.
Prime membership expansion
Amazon’s Prime Day summer sale event is designed to attract members to join the scheme in search of promised discounts. This year it was more successful than ever: the retailer said it saw more people join the scheme on the first day (July 15) than on any previous day, with day two of the event not far behind.
The evolution of voice commerce
Prime Day was also the biggest ever day for selling Amazon devices, many of which have Amazon’s voice assistant Alexa enabled. More than 60,000 smart home products from more than 7,400 brands are now compatible with Alexa, while other devices that have Alexa built in include Lexus, Toyota, BMW and Mini cars, LG TVs and ecobee’s latest smart thermostat. In a recognition of recent privacy issues, Alexa users can also instruct their device to delete either “what I just said” or “everything I said today.” A new Alexa Privacy Hub promises to give customers information and control over their Alexa experience.
Amazon is moving towards giving its Prime customers blanket next-day delivery. In Friday’s figures, Amazon founder Jeff Bezos said: “Customers are responding to Prime’s move to one-day delivery. We’ve received a lot of positive feedback and seen accelerating sales growth. Free one-day delivery is now available to Prime members on more than ten million items and we’re just getting started.”
The AmazonFresh grocery delivery service is also offering shoppers the ability to get their shopping faster, with Las Vegas customers now able to get goods delivered within one or two hours. Grocery delivery from its store-based Whole Foods Market business is now available within 90 US cities. Prime customers at those locations can get their natural and organic groceries delivered in an hour.
The retailer is also looking at robotics and automation to get goods there faster. The company as redesigned its delivery drones, being trialled in markets including the UK.
AmazonGo, the checkout-free grocery store, now has 13 branches. Elsewhere, the retailer is using machine learning both to power visual search through its StyleSnap feature, and to offer personalisation, through Amazon Personalize, to its AWS (Amazon Web Services) customers. Amazon Managed Blockchain is also available through AWS to enable users to execute transactions and maintain a central ledger record without the ned for a trusted, central authority. The company said that Amazon Managed Blockchain would scale “to support thousands of applications and millions of transactions using popular open-source frameworks like Hyperledger Fabric and Ethereum.”
Amazon’s financial results
Amazon reported a 20% rise in net sales, to $63.4bn (£51.7bn) in its second quarter to June 30. That’s up from $52.9bn (£43.2bn) a year earlier. Net income – or profits – rose to $2.6bn (£2.1bn) in the quarter, from $2.5bn (£2.0bn) a year earlier.
The retailer now expects third-quarter net sales to grow by between 17% and 24%, year-on-year, to between $66bn (£54bn) and $70bn (£57bn), while operating income is expected to come in lower than a year earlier at between $2.1bn (£1.7bn) and $3.1bn (£2.5bn).
Amazon is an Elite retailer in IRUK Top500 research.
Image courtesy of Amazon