In the last week, I’ve done nearly all my shopping at one store, grabbing tea, high-end shampoo, Nespresso pods and a king-size bed-in-a-box mattress all from the same place — Amazon.
With the global COVID-19 pandemic keeping more people at home and dependent on online shopping, I’m not alone in my choice to turn to Amazon for almost all my shopping needs.
According to a report on CNN, the company is expected to report a more than 20 percent increase in sales on its first quarter earnings call tomorrow, April 30, reaching $73 billion.
It should come as no surprise that the online retailer that spent the last few years making it as easy as possible to “buy now” online would be doing well in this situation. It’s so easy, in fact, that I often find myself willing to compromise on price or brand so that I don’t have to deal with entering my payment and shipping information on another website.
And the current pandemic is making it even more tempting than usual to buy groceries online.
Personally, as of now, I have not gotten into the habit of doing my full grocery shopping on Amazon. I still turn to local stores to do that in-person — but it’s only because Amazon doesn’t offer grocery delivery in my rural area. If they did, I’d be willing to pay a premium for it.
So is Amazon the online shopping hub that will save the candy industry? As people look to avoid going out into the world, is this where manufacturers should be looking to make most of their sales?
The simple answer is yes. If you’re not selling on Amazon at this point, you’re missing out on sales — and exactly how much you’re missing out on will likely only continue to increase.
The more complicated answer is that turning to Amazon for sales may only be a short-term solution.
Right now, Amazon is doing SO well that it's trying to decrease customer orders because it can’t keep up with demand. And that has had a ripple effect on manufacturers.
According to an article in Slate, “The company temporarily halted Fulfilled by Amazon shipments on nonessential items from third-party sellers, though Amazon reversed the ban this week. The company is also introducing waitlists for its Amazon Fresh and Whole Foods home grocery delivery service in an attempt to make the influx of orders more manageable.”
Amazon also called off campaigns for Mother’s Day and Father’s day, so confectioners hoping to use the upcoming holidays to increase sales may not see the spike they were hoping for.
In other words, Amazon is doing better than ever, and it’s somehow hurting the manufacturers that rely on its platform.
It’s too soon to know what permanent societal changes will be created by COVID-19. But Mintel forecasts online grocery sales will grow an estimated 33 percent during 2020, and as consumers find it easier to order those groceries online, they’re likely to stick with that habit when this pandemic finally ends.
The question then is, where will consumers go to do that shopping? And is it good news if the answer is Amazon most of the time? Having one place to focus your retail efforts might make things easier, but it also doesn’t leave much room for error.
The best advice is probably two-fold. Sell on Amazon now, but diversify as much as possible for the future.