The Pandemic is Playing To Almost Every One of Amazon's Strengths
As the coronavirus pandemic has forced people to stay inside, few companies have proven themselves as essential as Amazon. From groceries to cleaning supplies, shipments from Amazon have become lifelines for many who are steering clear of supermarkets and other physical retail stores. Company executives have likened the surge in demand to the annual holiday shopping crush. But e-commerce isn't the only sector where Amazon is booming. Analysts say its cloud business, Amazon Web Services, faces higher demand as people turn to some of its biggest clients -- from Zoom to Netflix -- for work and play. Amazon sells access to audiobooks and original television programs that are helping to entertain reluctant shut-ins. And with more people staying home, that's more time they have to engage with Amazon's AI-powered smart speakers.
The breadth of Amazon's sprawling business interests, and its increasingly central place in America's fragile supply chain, underscores the company's hold on consumers -- and its potential to solidify its dominance in the coming months. The longer this crisis goes on, the more formidable Amazon will become, according to James Bailey, a management professor at George Washington University's business school. "Every crisis creates a void," said Bailey. "And whatever force fills that void, inherits power." Amazon isn't the only company that could benefit. The crisis appears to be lifting the entire e-commerce industry, according to Bank of America research, which showed the sector grew 16% in March compared to a year ago. Those consumer habits could persist even after the crisis passes, marking a potential tidal wave of change benefiting Amazon's bottom line for years to come. But thanks to its existing advantages in scale and efficiency, Amazon stands to emerge from the pandemic stronger than many of its competitors, experts say. In light of the pandemic, Amazon could pull in as much as an additional $4 billion in revenue this year, though added costs of managing the pandemic may cut into Amazon's profits, said Bank of America in an investor note last week.
As the coronavirus pandemic has forced people to stay inside, few companies have proven themselves as essential as Amazon. From groceries to cleaning supplies, shipments from Amazon have become lifelines for many who are steering clear of supermarkets and other physical retail stores. Company executives have likened the surge in demand to the annual holiday shopping crush. But e-commerce isn't the only sector where Amazon is booming. Analysts say its cloud business, Amazon Web Services, faces higher demand as people turn to some of its biggest clients -- from Zoom to Netflix -- for work and play. Amazon sells access to audiobooks and original television programs that are helping to entertain reluctant shut-ins. And with more people staying home, that's more time they have to engage with Amazon's AI-powered smart speakers.
The breadth of Amazon's sprawling business interests, and its increasingly central place in America's fragile supply chain, underscores the company's hold on consumers -- and its potential to solidify its dominance in the coming months. The longer this crisis goes on, the more formidable Amazon will become, according to James Bailey, a management professor at George Washington University's business school. "Every crisis creates a void," said Bailey. "And whatever force fills that void, inherits power." Amazon isn't the only company that could benefit. The crisis appears to be lifting the entire e-commerce industry, according to Bank of America research, which showed the sector grew 16% in March compared to a year ago. Those consumer habits could persist even after the crisis passes, marking a potential tidal wave of change benefiting Amazon's bottom line for years to come. But thanks to its existing advantages in scale and efficiency, Amazon stands to emerge from the pandemic stronger than many of its competitors, experts say. In light of the pandemic, Amazon could pull in as much as an additional $4 billion in revenue this year, though added costs of managing the pandemic may cut into Amazon's profits, said Bank of America in an investor note last week.
