Amazon’s net sales rose 37% to $ 96.1 billion in the third quarter. This was again supported by strong customer demand as the pandemic continues to drive e-commerce growth – and the platform is preparing its transportation network for an unprecedented fourth quarter.
On a conference call, CFO Brian Olsavsky said the platform saw demand trends continue from the second quarter when online grocery sales tripled despite not delivering a lot of color, other than Amazon reaching “more customers” in grocery and year-over-year that Year-over-year sales growth in this category continues to accelerate.
“The strong growth in demand and sales in our major product categories worldwide includes hard wire, consumables, soft wire and media,” he said.
Olsavsky noted “strong engagement from Prime members” during the quarter but did not disclose an updated membership.
“Prime members continue to shop more often and in more categories than they did before the pandemic began,” he added. “They’re continuing to take advantage of Prime’s digital benefits, including Prime Video.”
In fact, he found that the 150 million Prime members worldwide who stream Prime Video rose more than 80% year over year in the third quarter.
The biggest headline of the third quarter, however, is arguably logistics.
Olsavsky said the platform hired 250,000 people in the third quarter and an additional 100,000 in October to meet increased demand. Many of these employees are on their transportation network to handle the aforementioned customer demand as well as the expected rush of orders during the holiday season.
According to Olsavsky, Amazon plans to expand the area of its fulfillment and logistics network by about 50% in 2020, with about half focusing on transportation facilities like sorting centers and delivery stations. He hopes this investment will ease some of the pressure on third-party couriers – and said Prime Day was a good stress test that left the platform. “[feeling] good about network performance. “
This is important as third-party vendors are re-using the platform’s FBA (Fulfilled By Amazon) program, which relies on itself when shipping orders on Amazon.
“We feel good that we have been able to develop this ability a lot this year because we needed it and will need it in the fourth quarter,” said Olsavsky. “Nevertheless it will be tight for everyone. And I think we’ll all be stretched and it’s beneficial … for people to order early this year. “
He also noted that the holidays are very uncertain – including the elections, which led to some disorderly in 2016.
A ray of hope (again): Amazon Advertising. This is thanks to the “very strong advertising performance in the third quarter,” which also includes monetizing additional traffic as “real estate for our advertisers,” said Olsavsky.
Now Amazon is focused on making its advertising tools easier to use, including making it easier for agencies and marketers to register and new product development – including opportunities for OTT video.
“We’re also very focused on serving customers more relevant ads, simplifying display ads, and then improving the usability of Amazon’s demand-side platform,” he added.