Amazon’s Move to the Suburbs
Amazon Plans to Open 1,000 New Delivery Centers
Amazon (AMZN) is growing its presence in suburban neighborhoods, packing them with new warehouses and blue delivery vans. The company plans to open 1,000 delivery centers around the country. Earlier this week, Amazon also announced that it is hiring 100,000 new workers in the US and Canada. So far this year, the company has added 308,000 new people to its workforce.
As Amazon builds its delivery network, it is becoming less reliant on shipping partners like UPS. Amazon will handle the deliveries of about 67% of its own packages this year and eventually hopes to scale up to doing 85% of its own shipping.
Keeping Up With Traditional Retailers
When the pandemic first hit the US, Amazon experienced a rush of orders and had trouble keeping up. As people stocked up on cleaning products, home office supplies, and more, Amazon struggled with inventory shortages and shipping delays. Between January and June, Amazon’s share of US online retail dropped from 42.1% to 38.5%. Meanwhile, Walmart’s (WMT) ecommerce market share went from 2.2% to 3.5% and Target’s (TGT) rose from 3.5% to 5.0%.
Companies like Target and Walmart have been able to leverage their brick-and-mortar stores in locations across suburban America to help with their ecommerce operations. Now, Amazon is doing all it can to expand in the suburbs. The company wants to make sure it stays ahead of traditional retailers expanding their ecommerce operations—especially as Walmart rolls out Walmart+, a subscription service similar to Amazon Prime.
Looking Toward an Unconventional Holiday Season
Many are looking ahead at what will be an unconventional holiday shopping season. People will probably travel less and do less in-person shopping, which will likely lead to an ecommerce spike.
Amazon is planning a Prime Day soon, and while it has not released a date yet, many expect it will be sometime in early October—which could be a way to help get consumers in the holiday shopping spirit early. Investors will be curious to see if Amazon’s move to the suburbs pays off.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.