Several key announcements made news when Amazon released its first-quarter earnings yesterday. Beyond reporting another quarter of double-digital growth, the retailer announced that free one-day shipping is coming for Prime members. Here’s a quick wrap-up of the top 10 takeaways:
1. Fulfillment innovation: Beyond the big news about free one-day shipping replacing free two-day shipping, Amazon also launched new products and services to expand Amazon Key, including Key for Garage that now joins Key for Car and Key for Home. Lockers at the Coachella music festival were another opportunity to get products into shoppers’ hands in a unique location.
2. Sustainability: Amazon is sensing some pressure to deliver a more environmentally friendly model. While the model is just emerging, shoppers will continue to question the company’s sustainability choices more loudly. A few announcements on the topic yesterday related to Amazon Day, Shipment Zero, and the AWS data centers powered with renewable energy. Expect continued momentum in that direction.
3. Self-managed healthcare: While Amazon launched Haven recently in partnership with JPMorgan Chase and Berkshire Hathaway and made some initial touchpoints with PillPack, the retailer’s vision around healthcare remains soft. It introduced a few interesting HIPAA-compliant Alexa skills, pointing to Amazon enabling consumers to better manage their health and that of their families. U.S. shoppers can also use their flexible spending and HSA accounts on Amazon so they do not have to submit receipts for reimbursement. That’s a huge timesaver.
4. International expansion: Amazon posted a much smaller loss versus last year in this part of the business, which likely indicates successes in India where it has managed to remain compliant even with the latest governmental changes. Alexa features have expanded considerably across the globe.
5. AWS as an innovative enterprise tool: Heavy AWS resourcing investments are enabling the cloud-based business to become a transformational enterprise tool. The WorkLink tool, which acts as a simpler VPN and allows users to access internal secure files via mobile, seems like an especially exciting product, particularly for remote workers on the go.
6. Grocery: Physical store sales are fairly flat, and Amazon did not have a whole lot to say about grocery other than a continued Prime Now expansion and a third round of price cuts at Whole Foods. This is a challenging space for Amazon, and one where traditional brick-and-mortar retailers are gaining momentum. Look for upcoming F3 announcements to drive a renewed energy around food at Amazon.
7. Alexa everywhere: The voice strategy clearly continues in the direction of integrating Alexa in everyday objects, making her a ubiquitous assistant we can call on in the car, the kitchen, or the office. More than 90,000 skills are now available. While not (yet?) a shopping tool, its expanding presence makes it a key lever for brands, especially at the top of the funnel.
8. Partnerships: Amazon is stepping up its collaborative efforts, including relationships with other retailers. Apple Music is now available with Alexa on devices in the U.S. and U.K. The Apple TV app will soon be watchable on Fire TV. Amazon and Google are collaborating to launch the YouTube app on Fire TV in the near term, while the Prime Video app will stream to Chromecast and be offered to Android TV device partners. MLB.tv is now offered as a subscription on Prime Video.
9. Marketplace: Amazon continues to focus on its third-party selling community. It specifically highlighted its support for small and medium-sized businesses. Its new Selling Partner Summits, designed to help drive Marketplace business growth, sold out in only six weeks, indicating a real need for stronger collaboration.
10. Community building: Amazon Future Engineer announced its scholarship recipients as well as robotics grants to encourage underrepresented students to study computer science and coding. The retailer is also collaborating with the National Science Foundation to offer research grants in artificial intelligence with the goal of finding solutions for important issues facing our society.
For more information, please contact:
Alice Fournier, Vice President
Rachel Dalton, Director