Amazon
The tech giant registered an
Amazon's primary source of revenue has been its cloud computing division, Amazon Web Services (AWS), especially during times when its retail business experiences challenges. However, the recent quarter showed a decline in AWS revenue growth, reaching only 20% - the slowest growth rate since Amazon started reporting it.
“Everyone is trying to cut their costs,” said Brian Olsavsky, Chief Financial Officer of the company warning the next couple of quarters to witness the same fate.
In light of this economic instability, CEO Andy Jassy maintained that they seek to build strong relationships by helping their “customers find a way to save money.”
Sales in the online retail division of Amazon decreased by 2% year over year. As a result of consumers cutting back on discretionary spending due to increased gas and food prices, the company has been dealing with declining sales. With consumers increasingly resorting to physical businesses, the pandemic-driven e-commerce boom has also faded out.
Amazon seeks to cut costs along with its customers, said Mr. Olsavsky. In an attempt to keep up with the uncertain economic environment, he said, they are eliminating 18,000 job roles impacting stores, businesses, and internal teams.
While the company reduces white-collar jobs by imposing a
The e-commerce retailer follows a customer-centric approach, and with the one-day delivery feature that it offers for its Prime Members, speed and accuracy are their utmost priority. To save time, the company
“We realize that we exist to make customers' lives better and easier every day and relentlessly went to do so. And being maniacally focused on the customer experiences, always going to be a top priority for us,” said Mr. Jassy.
The company has been in a long battle with warehouse workers demanding higher pay raises and better working environments. Its reputation precedes the
Back to cutting costs and increasing revenues, Amazon pointed out how the need for long-term strategic investment and an in-depth assessment of the downturn of events led them to eliminate “some programs in fabric.com and Amazon Care and Amazon Glo, and Amazon Explore.”
Adding to it, the company has high aspirations for expanding into the grocery market with the concept of introducing hybrid stores facilitating omnichannel functionality. The CEO said that the grocery format is still under experimentation and they have decided to go slower on the implementation until they “had a format” worth rolling out.
Surpassing internet ad businesses like Google, Facebook, and Snap, the company’s advertising income increased by 19% from a year earlier (23% discounting changes in foreign exchange rates). Amazon has recently become one of the market leaders in digital advertising by providing sellers and brands with more options for paying to advertise their products on the company's website, applications, and media properties.
With its Prime subscription benefits, the company could bring up the engagement rate by about 11% among the age group of the 18-34-year-old bracket.
“ Prime membership continues to be a great value for our customers, and improving our Prime benefits is a continuous part of our investment strategy. Along with competitive pricing, broad selection, and faster delivery speed, we've seen Prime members respond to our expanding entertainment offering” said Mr. Olsavsky.
The company sees video as the major driver of Prime Member engagement and Prime Member acquisition. With continued investments in large video properties, the e-commerce giant stays optimistic not only about the acquisition but also the retention of Prime member accounts.
Amazon keeps the window open for witnessing some gradual economic downturns in the upcoming quarter due to uncertain environments. However, it expects to draw profits from its cloud computing system AWS, an evergrowing community of Prime members, and the widespread global transportation network. It also aims at expanding its business overseas with autonomous solutions facilitating warehouse operations, improving the efficiency of fulfillment centers.