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What Did Amazon Do This Week? - April 28th

WDADTW is the newsletter that even Amazon execs read to keep up with the world of Amazon. Let me know
April 28 · Issue #11 · View online
What Did Amazon Do This Week?
WDADTW is the newsletter that even Amazon execs read to keep up with the world of Amazon.
Let me know you think it can be improved, simply hit reply or email me here.

Q1 Results, Changes In Delivery Sees Analysts Rally
Despite the ‘weak’ guidance, everyone’s favourite cardboard abuser saw revenue of $59.7B, up 17% YoY, operating income of $4.4B, up from $1.9B in Q1 2018, and net income of $3.6B, up from $1.6B in Q1 2018. Not bad at all. How did Amazon do it? Reduced fulfilment investment (Amazon built 15% less than in 2017), hiring was down 14% YoY (excluding Whole Foods and other acquisitions), fewer leases (Amazon only grew this 10% YoY) and…they just sold a lot of stuff, around $60 billion sales won’t make anyone on Wall Street cry anything but tears of joy. AWS also did extremely well (up 41 per cent to $7.7bn, though this was slower than last year’s 49 per cent growth figures). Q1 is also given a bump as there is little minuses applied - the big one being investments and employee stock compensations, while it is good news now, other quarters may be less golden. Lots of stats came out too:
  • Fire TV now has more than 30 million active users.
  • Alexa now has +90,000 skills in the Alexa Skills Store
  • Amazon Studios greenlit more than 20 new and returning local Prime Original Series. Amazon says the company has already spent $1.7 billion on content in Q1 '19 alone (up 13% YoY).
Unexpectedly, Amazon also announced that it is in the process of overhauling Amazon Prime delivery to offer one-day shipping instead of two for free at a cost of $800 million. Per Amazon’s CFO, Brian Olsavsky, these upgrades are coming sooner rather than later (Q2) and the goal is to make one-day delivery the rule, not the exception, for members of Amazon Prime. A huge blow for competitors as they already struggle to keep up with Amazon in this key area. Shares of Target and Walmart both declined on the news as both announced billions of spend to reach the old level.
(A new section that offers some low-level recommendations on what do with with the major Amazon news this week. )
  • Review distribution strategy and partners immediately. Amazon isn’t the only game in town but the moves to be more convenient to the consumer (including Amazon Day which isn’t even fully rolled out yet) will make Amazon a force to be reckoned with and change customer expectations of at least 100 million in the US alone.
  • Think about the environmental play. Amazon falls down in this area (although it is making changes). Could/should there be a play for slow delivery for you/your brand?
  • Review your ad-spend lay-down. Amazon Prime now looks much more tempting for a lot of people and so Prime Video will see more eyeballs.
  • Review your loyalty strategy. Amazon Prime is a great case study in what’s working - what can you borrow?
Need a bespoke/full strategy on Amazon? Hit reply and let us know.
Amazon is working on a high-def music platform. ··· Amazon apologised for accidentally uploading the second episode of Game of Thrones early. ··· Amazon has signed a three book deal with mystery writer TP Fielden. ··· Rachel Brosnahan and Jordan Horowitz have partnered on ‘I’m your woman’ drama for Amazon. ··· Audible launched the first Alexa-powered customer service line. ··· Amazon is on pace to spend $7 billion on content in 2019. ··· Amazon is in talks to buy Fox-21 sports network with Sinclair. ··· ’Ninth Street Women’ (book) will be made into content for Amazon Prime.
Amazon announced one-day delivery is coming. ··· Amazon ad business growth is slowing. ··· Amazon Prime uptake in the UK is slowing. ··· Virgin and TalkTalk have integrated Prime Video into their Set-Top-Box offerings. ··· US Prime members can now have deliveries left in their garage thanks to ‘Key by Amazon’ launching several partnerships (and dropped the price on these devices…). ··· From July, Kohl’s stores will be Amazon return depots. ··· Amazon is strengthening ties with French food brand 'Casino’ by installing lockers and expanding brands. ··· You can now pay with Bitcoin ('Lightning’) on Amazon. ··· Amazon launched own-product ranges of salsa (Solimo) oils, sauces and vinegars (Happy Belly) this week. ··· Amazon sales increased 17% in Q1. ··· Per Amazon, private labels make up 1% of sales. ··· Amazon will hire +1,300 in North Las Vegas facility. ··· Amazon has signed a large lease in Greensboro, North Carolina and Medford.
Amazon is combating fraud (and training its facial recognition products?) by making drivers take selfies. ··· Apple has signed a $1.5 billion, 5-year deal with AWS (but is cutting spending slowly). ··· AWS grew 41% in Q1. ··· Alexa user privacy was again under fire as employees have access to individual data (although Amazon says closely controlled). ··· AWS launched in Hong Kong. ··· Vertafore (insurance industry software provider) now uses AWS.
Leaked documents show Amazon’s computer software can track and fire employees. ··· Amazon has hired Tasemade exec, Andrew Saunders, to run its Entertainment marketing division. ··· Amazon plans 1,000 new jobs in East Midlands (UK) fulfilment expansion plan. ··· Amazon is partnering with Ford to develop autonomous vehicles. ··· Amazon has started to market PillPack to Amazon Prime members. ··· Amazon is testing a patent infringement program for sellers claiming infringement. ··· Amazon confirmed a new fulfilment site in Daytona Beach, Florida. ··· Amazon has bought land in Bellevue, Washington. ··· Amazon signed an anti-LGBT legislation letter.
— Amazon’s fake reviews are still big news in the UK. [FT]
— Amazon was listed among most dangerous places to work by Council for Occupational Safety and Health. [COSH]
— Here’s how to download your entire Amazon purchase history. [Lifehacker]
— Some Amazon Sellers are spending £10k a month to get to the top of Amazon’s results. [Buzzfeed]
— Amazon has not bought back stock for 7 years. [MarketWatch]
— An NFL star gave his teammates Amazon stock as a thank you. [CNN]
— A cheatsheet on Amazon revenues. [Digiday]
— How Amazon uses agile teams and structures to innovate for customers. [HRPS]
SHARE PRICE = $1,950.63 ··· CHANGE = -48.38 (2.54 %) ··· MARKET CAP = $959,814.12 B.
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