Wunderman Thompson Commerce Comments on Amazon Q3 Earnings Report

Yesterday, Amazon reported a sales growth of 37% in its Q3 earnings – exceeding analyst expectations.

Hugh Fletcher, global head of consultancy and Innovation at Wunderman Thompson Commerce, a global eCommerce consultancy gives his industry analysis. 

Hugh argues Amazon’s vast infrastructure puts it in a strong position to deal with the demand of the upcoming festive period, while investments in improving its image as an ethical company should help consolidate its customer-base as consumers increasingly look to purchase from responsible businesses.

Hugh Fletcher, global head of consultancy and innovation, Wunderman Thompson Commerce: “Amazon has adapted strongly to the challenges posed during the Covid-19 pandemic. Its existing infrastructure has meant it was able to cope with the spike in demand and continue to grow its business. Moreover, the cleverly timed Prime Day has allowed it to own the beginning of the peak discounting period, contributing to the creation of a 10-week ‘Mega Peak’. We’re predicting that 65% of Black Friday spend this year will be on Amazon as consumers get their Christmas shopping done early, with festive shopping likely be dominated by the platform as well.

“Significant investment to tackle negative publicity around the safety of its warehouses and a continued, concerted effort to be viewed as an ethical business, with the launch of an 'eco-friendly' shopping platform is part of Amazon’s long-term strategy to consolidate its global customer base. It’s a reflection of changing shopping habits with 55% of consumers considering a company’s ethics and morals when making a purchase and 46% actively choosing companies that are more environmentally responsible.

“Amazon is well-equipped to deal with the uptick in demand over the next few months, but the ever-changing coronavirus restrictions will continue to pose a challenge. The potential of a second lockdown looms and the UK’s imminent exit from the EU is contributing to consumers’ purse strings tightening. It’s probable that Amazon will be best placed to ‘own’ Q4 – brands and retailers therefore need to ensure they have a balanced eCommerce approach that can combat this during the most important period in the retail calendar.”