Amazon adds customers, workers and robots
Sales are up double digits in North America in Q3 2015 for Amazon, a trend that’s expected to continue companywide heading into the 2015 holiday shopping season. To help keep up with increasing demand, Amazon is going to be hiring more seasonal employees and expanding its Prime Now same-day delivery program.
The following are operational updates discussed in Amazon’s Q3 call with investors Oct. 22.
- Marketplace volume: Merchants selling through the Amazon.com marketplace accounted for 46% of units sold versus 42% a year earlier and up from 45% in Q2 of this year.
- Sales: In North America, Amazon's sales were up 28.3% to $15.006 billion from $11.699 billion a year earlier.
- Doubling up on robots: Amazon at the end of September had roughly 30,000 robots in operation at 13 fulfillment centers, up from 15,000 in 10 fulfillment centers at the end of 2014, and 1,300 in May 2014. The technology comes from Amazon’s purchase of robotic logistical provider Kiva Systems Inc. in 2012 for $775 million. An estimate from Janney Capital Markets says using the robots enables fulfillment workers to pick items two or three times faster than filling orders manually.
- Holiday outlook: Amazon says it expects net sales of between $33.5 billion and $36.75 billion, or growth of between 14% and 25%, in the fourth quarter.
- Customer count: Approximately 272 million consumers globally are considered “active customers,” having bought something through Amazon in the prior 12 months. In Q3 2014, the active customer count was 244 million.
- Amazon India metrics: Amazon says the number of active customers buying on Amazon.in is up 230% year over year, and the number of sellers is up 250% year over year. 40,000 products are being added to Amazon.in daily. 90% of sellers on Amazon.in use Amazon’s fulfillment and logistics services, and fulfillment capacity in India is triple what it was a year ago. In 2014, Amazon said it would invest $2 billion in India, a market in which Amazon CEO has said he sees “huge potential.” Under Indian law, Amazon.com is not allowed to sell physical goods directly to consumers, but other merchants can sell on the Amazon.in site to Indian shoppers.
More Amazon news for the week ended Oct. 23:
- Prime Now expansion: Amazon continued to expand its Prime Now service to more cities, launching it last week in San Antonio and the San Francisco Bay Area. It is now available in 17 metropolitan areas in the United States. Shoppers place their order through Amazon’s Prime Now mobile app and get delivery in as little as one hour for a fee of $7.99. Prime members willing to wait two hours pay no fee for the fast delivery.
- Not just fast but free: Same-day (by 9 P.M.) delivery of goods ordered on Amazon.com before noon is now free to Prime members in the Chicago and Orlando metro areas. Prime members in 16 metro areas now are eligible for free same-day delivery on orders of $35 or more. Amazon began offering same-day delivery of some products in some cities in 2009 for an added delivery fee of $5.99.
- Not just fast, but hot too: Prime customers in Portland, Ore., can now order food from area restaurants through the Prime Now mobile app and get it delivered in an hour or less. Amazon began testing the service as part of Prime Now in its Seattle hometown in September, an outgrowth of an earlier test through its Amazon Local service.
- Holiday hires: Amazon.com will hire 100,000 seasonal employees to work in its U.S. fulfillment and sortation centers. That 25% more than the 80,000 it hired last year and double the number of hires just three years ago.