Amazon Proves Consumers Are Shopping, With $134.4B in Sales in Q2
As other retailers grapple with inflation, Amazon seems to be addressing the matter with advantage.
Q2 2023 went down as Amazon’s most impressive, surpassing expectations. “It was another strong quarter of progress for Amazon,” said CEO Andy Jassy in a statement Thursday (Aug. 3).
The profits underscore the effectiveness of Jassy’s endeavors to reduce costs. Amazon executed its most extensive workforce reduction, eliminating 27,000 positions since the previous autumn and then a “small number” of employees in its Pharmacy business in July.
Read more: Amazon Pharmacy Division Lays Off ‘Small Number’ of Employees
Additionally, corporate recruitment was put on hold, and Jassy actively sought to curtail expenditures in various departments. As of the close of the second quarter, Amazon’s global workforce totaled 1.46 million, according to Statista.
During July, Amazon had its best Prime Day ever. Data from Adobe Analytics shows Prime Day spending in the U.S. reached $12.7 billion, a 6.1% increase from the previous year and a record for this sales event. Amazon said shoppers collectively purchased over 375 million items during the event. The first day of the sale was the company’s most lucrative single sales day in its history.
Read more: Amazon’s Prime Day Sets Record With 375 Million Items Sold
Amazon highlighted the role of small businesses in this year’s Prime Day, with their contribution outperforming Amazon’s own retail business.
Read more: Small Businesses Drive Amazon’s Prime Day New Record
Prior to the event, PYMNTS interviewed Claire O’Donnell, director of selling partner empowerment, communities and trust at Amazon. The conversation revolved around Amazon’s fresh emphasis promoting deals originating from small and medium-sized businesses (SMBs).
O’Donnell highlighted a shift in consumer behavior, particularly among younger demographics, in which shopping decisions are harmonizing with personal beliefs. This included patronizing small enterprises. In reaction to this, Amazon promoted small businesses.
Members had the opportunity to explore deals beyond Amazon’s own store, thanks to a new perk known as Buy With Prime. The feature offered U.S.-based members the same benefits and trustworthiness of Prime when they made purchases directly from participating brands’ websites.
Promotions were featured across various channels on Amazon, including on-site banners within the Amazon store, content crafted by influencers, and digital campaigns aimed at raising awareness.
Participating merchants collectively experienced a 10-fold rise in daily orders through Buy With Prime.
Read more: Amazon Says Prime Day 2023 Will Highlight Small Business
Amazon also explored novel avenues to attract consumer spending.
As an illustration, Amazon forged a partnership with the travel booking platform Priceline to provide exclusive discounts during Prime Day.
Read more: Amazon Uses Priceline Partnership to Grab Travel Spend on Prime Day
However, Amazon's financial report for the second quarter did include Prime Day statistics as the event occurred after the conclusion of the quarter on June 30.
Amazon by the Numbers
In the second quarter, Amazon net sales surged 11% to reach $134.4 billion, from $121.2 billion in the same quarter of 2022.
The North America segment recording an 11% boost in sales, to $82.5 billion. The international segment reported a 10% year-over-year increase in sales, reaching $29.7 billion.
Operating income soared to $7.7 billion during the second quarter, from $3.3 billion in the same period of 2022. North America operating income reached $3.2 billion, a rebound from the loss of $0.6 billion year over year. The international segment reported an operating loss of $0.9 billion, an improvement from the $1.8 billion operating loss in the second quarter of 2022. Net income was $6.7 billion.
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