How Amazon Stocks Are Thriving Despite the Coronavirus Pandemic

The ongoing coronavirus pandemic has affected numerous industries, leading to severe disruptions across the globe. However, the e-commerce giant, Amazon, has managed to outperform expectations not only during this challenging period but also thereafter. The surge in Amazon's stock price is a testament to the company's resilience and adaptability in a rapidly changing market. Let's explore the factors behind Amazon's robust performance amid the pandemic and its future prospects.

Spiking Demand and Increased Sales

Increased Product Deliveries
The pandemic has led to a significant surge in demand for product deliveries. For instance, Amazon had to prioritize essential items, stating, “We’re not shipping your books and exercise gear right now because demand for groceries is so high.” This indicates a substantial rise in sales of necessary goods such as groceries and health supplies. Additionally, Amazon saw a spike in sales of streaming media and ebooks due to people spending more time at home, further boosting its revenue streams.

Boost in Amazon Prime Subscriptions

Amazon Prime
The pandemic has led to a surge in Amazon Prime subscriptions as more people choose to stay home. Amazon Prime offers a wide range of benefits, such as access to streaming services, free two-day shipping, and exclusive deals. Once signed up, the convenience of Amazon Prime becomes addictive, leading to increased customer loyalty. With more people relying on Amazon for essential items, the demand for Prime memberships had grown exponentially.

Adaptability of Amazon's Business Model

Model Without Brick-and-Mortar Stores
Unlike traditional retail giants such as Macy's and J.C. Penny, Amazon’s business model does not rely on physical stores. In a time where people are discouraged from leaving their homes to shop for non-essential items, Amazon’s convenience has been invaluable. Fast shipping, excellent customer service, and a vast array of products available online make Amazon the go-to platform for most shoppers. Moreover, the pandemic has accelerated the shift towards online shopping, making Amazon one of the frontrunners in this trend.

Anticipated Future Performance

Employee Hiring and Operational Adjustments
In response to the increased demand, Amazon plans to hire an additional 70,000 employees to meet the surge of home deliveries. Even post-lockdown, this workforce may remain as people continue to shop online out of convenience and safety. The market is already pricing in Amazon’s future profits based on current trends, making its stock price perform exceptionally well.

Conclusion

In conclusion, the ongoing pandemic has accelerated the shift towards online retail, and Amazon has capitalized on this trend by demonstrating exceptional adaptability and customer service. The surge in demand for essential items, the increase in Prime memberships, and the robust business model have all contributed to Amazon's thriving stock performance. As the world continues to adapt to the "new normal," Amazon is uniquely positioned to continue its growth and maintain its status as a global leader in e-commerce.

Further Reading

To learn more about how Amazon has managed to thrive during the pandemic and its impact on the retail industry, please refer to the following articles:

Amazon Lowers Barrier to Prime Buying Amazon Creates 100,000 Jobs Amid Coronavirus Pandemic Coronavirus and the Shuttering of Retail Stores: How Are Companies Like Amazon Doing?