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.
The State of Streaming
NBC’s Peacock Sees Growth
As the pandemic continues, consumers are still hungry for video streaming content, and platforms are crowding into the market competing for their attention. Though Netflix (NFLX) is still the name to beat and is outspending rivals on acquiring and creating content, there are also other services trying out new strategies and seeing significant growth.
Peacock, NBC’s (CMCSA) streaming service, recently hit 15 million sign ups. This marks a 50% increase in signups for the platform since the end of July. The free, ad-supported service hopes to have 30 million to 35 million active users by 2024.
AT&T’s HBO Creates Ad-Supported, Cheaper Service
AT&T (T) plans to offer a new version of HBO Max starting next spring. This iteration of the service will be cheaper than the current version of HBO Max, which costs $14.99 per month. HBO will also continue to offer the more expensive, ad-free version of the service.
The new HBO Max will include some advertising, which marks a significant shift for the company. HBO has not used advertising for its 47-year history. HBO Max and HBO currently have over 36 million US subscribers. The company’s goal is to have 50 million US subscribers by 2025.
ViacomCBS Rebrands its Streaming Service
ViacomCBS (VIAC) is launching a new iteration of CBS All Access which will be called Paramount+ after the company’s movie studio. The platform will have exclusive, original shows and is scheduled to roll out early in 2021.
As the weather starts to get cooler and options for outdoor activities become fewer, streaming numbers may get a boost this fall and winter. Investors will be following closely to see which of the many companies vying for viewers will come out ahead.
COVID-19 Trends: Freelancing and Moving Back Home
The Majority of 18- to 29-Year-Olds Are Living at Home
Almost 30 million Americans in their 20s are living at home right now. This marks the first time since the Great Depression that the majority of 18- to 29-year-olds in the country are not living on their own.
Young people have moved home for a variety of reasons. Many have lost their jobs and are looking to save money on rent. Also, some people who are working remotely want the company and comfort of their families during an isolating time.
The Freelance Economy Is Booming
Millions of young people are also turning to freelance work as a result of COVID-19 and its economic impact. According to a report released recently by Upwork, the freelance economy is worth $1.2 trillion—a 22% increase from 2019 data. 36% of workers in the US are full-time freelancers, which is up from 28% in 2019.
At the moment, freelance work is easier to do in some industries because so many workplaces are operating remotely. Many people are also turning to freelancing if they are trying to juggle teaching their children at home and making money. Additionally, people who have lost their jobs are turning to freelancing as a way to pay the bills.
These Trends May Be Here to Stay
Both these trends—more people freelancing and more people living close to family—could continue long after the COVID-19 pandemic subsides. Companies have grown used to remote work during this period, and some may never go back to the office in the same capacity as before the pandemic. For this reason, freelancing and living close to family might become even more common.
The rise of remote work will make it easier for people to work and live in smaller towns close to family instead of staying tied to urban centers because of their careers. Similarly, analysts predict that companies will continue to shift white-collar work to freelancers instead of full-time employees due remote work becoming more normalized.