Amazon and Walmart Lead Retail Industry Shift to Returns and Results
While early industry-wide readings on retail sales range from record high to essentially flat if 7% inflation is factored in, fears of a fourth-quarter washout amid a glut of inventory and promotion appear to have been overblown, with pockets of strength and weakness offset by a tide of not so bad.
As PYMNTS predicted a month ago, the less worse than expected Christmas looks to have arrived, at least from a top-line revenue perspective, but how the cost of all that discounting, hustling and frantic last-minute fulfillment plays out on the bottom line remains to be seen.
While much has been said and written about Amazon’s stock being cut in half over the past year, roughly 30% of that drop has happened in the past three months alone since the eCommerce leader reported disappointing third-quarter results in late October.
It’s a retail riddle set to be half-answered by the end of the month, when Amazon reports its fourth-quarter results, some 90 days after it promised investors and warned employees that it would be doing “more with less” going forward.
That strategy held true this week as the Seattle-based business rounded up its headcount cuts to 18,000.
“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” CEO Andy Jassy said in an update memo to employees this week, lamenting the delivery of bad news but also reassuring the 98% of unaffected staff that the cuts back will help Amazon pursue long-term opportunities with a stronger cost structure.
“I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles,” Jassy added, reminding his fellow employees — and the broader retail community — that no business is in “heavy people expansion mode every year.”
Running the Business
To be sure, Amazon and Walmart are also actively pursuing other ways to boost growth and save costs while getting consumers the goods they want as quickly as possible.
For its part, Walmart rolled out an update on its drone delivery platform, which has grown to 36 stores in 7 states and completed over 6,000 deliveries.
According to the company’s report, the appeal of 30-minute delivery has seen items such as cookies and ice cream make it into the top-5 list of items ordered.
Never to be outdone on the tech front, Amazon announced this week that its Ring doorbell franchise was officially expanding to include a new Ring Car Cam.
In a blog post, Amazon said it was now taking discounted pre-orders for its new Car Cam at a cost of $199, or $50 less than retail price, and will begin shipping the devices to US customers in February. In addition, there’s also a $6 per month or $60 per year Protect Go subscription monitoring service available.
“We’ve expanded Ring over the years and now offer more than 50 devices across five categories, including smart cameras, alarms, and lighting,” Amazon Ring’s CTO Josh Roth said in the blog, expressing his excitement about introducing the product debut in a brand-new category.” Your vehicle is an extension of your home, and I’m proud we’ve been able to invent a new way to protect it on your behalf,” he added.