Amazon celebrated its 5th Prime Day, which is the largest global shopping event exclusively for Prime customers. In 2019 the ‘day’ was extended to 48 hours and held over 15 and 16, July.
Amazon reported this year’s two-day event was more successful, in terms of sales, than 2018’s Black Friday and Cyber Monday together. Amazon’s 100m customers worldwide bought 175m products in the flash sale, up from 100m in 2018. According to Yahoo, two experts estimated that more than $6bn worth of goods were sold. Post & Parcels commented that this was the ‘fastest Prime Day’ ever. Using Prime Free One-Day, Prime Free Same-Day, or Prime Now worldwide, millions of items were shipped in a day or less.
Despite the success of Prime Day 2019, the vast volumes combined with customer expectations put pressure across supply chains causing delivery delays.
Customers were left irritated as delivery times were rising as they shopped, taking to social media to air their frustrations. Examples included four-day delivery, up to one example of an item taking nearly two weeks. Amazon responded, “Product availability, additional preparation time, severe weather, and delivery capacity can all affect your delivery date,” on its Twitter account. Customers were questioning what they were paying for.
The delays brought concerns for the US Retail, Wholesale and Department Store Union, as some staff protested during the two-day event. President Stuart Applebaum said, “Amazon fulfilment workers were already facing speeds of 200-300 orders per hour in 12-hour shifts before the new policy. They were struggling to maintain that pace, even before the one-day shipping policy was announced.”
This comes after the announcement in April when Amazon said it would spend $800m during the second quarter of 2019 to make one-day free shipping the standard for Prime customers.
The Wall Street Journal quoted Amazon spokeswoman, Julie Law, “People are not focused on speed, they are focused on deals, we don’t want to disappoint customers ever, but our capacity for shipping has limits.” For Amazon, with a customer-centric approach to business, it’s surprising to see it doesn’t believe customers are focussed on speed amid complaints regarding delivery times. After it created the free and fast culture, its inability to deliver self-made standards, demonstrates potential fragility in its supply chain and the difficulties to keep up during unseasonal peaks because of overwhelming volumes.
In efforts to alleviate future logistics strains whilst making one-day delivery standard for Prime users, Amazon confirmed it has bought 2,237 vans. This is further to its US infrastructure improvements – its set to increase its fleet to 70 cargo planes and spend nearly $1.5bn on a new air cargo hub at the Cincinnati/Northern Kentucky Airport in Hebron, Kentucky, US.
Amazon clearly has not handled the logistics side of this year’s Prime Day as it would have like to or should have. It is interesting is to note, that Prime Day’s emphasis is now more firmly on deals and its focus on delivery speed has lessened – intentional or not, this is likely to ease the pressure of its fulfilment and logistics operations during peak times.
Source: Transport Intelligence, July 25, 2019
Author: Holly Stewart
