Amazon Surges Heavily Out of the Traditional Retail Sector’s Downfall Amid COVID-19
As per the source, it seems that the coronavirus pandemic has actually put online retailers like Amazon in a beneficial position. The traditional brick and mortar stores in the US, and for that matter of fact, across the globe have been on a continuous downfall since the lockdown has been implemented in order to stop spreading of the novel coronavirus.
In this scenario, people are placing online orders from sites like Amazon Fresh for regular essentials like toilet papers, medicines, cereals, vegetables, pulses, etc. The demand for these products has increased to such an extent that Amazon has hired 100,000 new warehouse and delivery workers since last month. As per the recent reports, it plans to hire 75000 more workers in order to keep up with the surge in demands.
The overwhelming demand-surge has triggered Amazon’s shares to a new high, which stood at a positive 28% as on 16th April. Apart from Amazon, other online platforms like Netflix have also experience increased traffic, as people are relying on these services in order to cope up with the lockdown.
Andrew Lipsman, a principal analyst at eMarketer, is of the opinion that retailers who are not in the apparel, furniture and luxury category, will possible be able to withstand the hit, and recover pretty quickly.
Amazon’s performance in the last couple of months is indeed bright, especially when the traditional retail sector has plummeted ever since the pandemic struck. A huge number of Brick and mortar stores have closed down over the last few months across the US, and those which are still open have faced a massive reduction in footfall. So much so, that retail sales across the US have reduced by 8.7% in March.
Consumer spending has also reduced drastically, as most people are buying only essentials, and are looking to save as much money as possible, especially in a scenario where 22 million Americans have filed for unemployment over the last three months.