• Amazon spent $27 billion on shipping in 2018—a number it’s hoping to lower by expanding its freight airline. The company announced in December 2018 that it would increase its fleet to 50 planes and open up new regional hubs. In its 2018 annual financial report, Amazon also spotlit “transportation and logistics services,” which is claims is facing “intense competition.”
  • According to its latest annual filing, Amazon now operates 288 million square feet of real estate—a footprint that includes data centers, offices, retail stores and warehouses. But as criticism against cashless retail mounts, it may throw a wrench in Amazon’s planned expansion of its cashierless retail concept, Amazon Go, from 10 to 3,000 stores by 2021. Last week in Philadelphia, a citywide proposal passed that would ban stores that don’t accept cash payments. London, however, is less apprehensive and plans to adopt the first Amazon Go for the UK.
  • The number of Amazon exclusives (223)—Amazon-only partnerships with third-party brands—have surpassed the number of Amazon private labels (119). Regardless of the ratio, both categories strengthen Amazon’s appeal, given that these exclusives and private labels aren’t available anywhere else. Exclusive Amazon partnerships also require brands to share 5% of product revenues with the retailer in exchange for fulfillment by Amazon, participation in Prime and counterfeit protection, among other perks. It’s also using Amazon Live to plug its private labels.
  • Brands now have access to Amazon Moments—a new rewards program that allows them to send their customers physical and digital Amazon merch as gifts when they perform a certain action. Brands define the actions (“moments”) they want to reward—a renewed subscription, for example—which rewards they will send for each action, and pay Amazon a fee each time a reward is issued. The company argues that the program is cheaper than setting up an in-house loyalty program, because Amazon handles both the sourcing and fulfillment of the rewards. But it does a lot of Amazon too, essentially acting as an extension of Amazon’s booming advertising business, a way for the retailer to to grow its presence beyond its own platform and a way to receive data from its partner companies’ sites and apps.
  • Prices at Whole Foods are increasing—a marked shift since the Amazon acquisition, which lowered price tags at the grocery retailer. The price hikes are meant to offset rising supplier costs in the face of inflation—some are also a result of expired annual contracts that lowered the prices of approximately 700 products. While this isn’t a Whole Foods-specific trend, Whole Foods is more prone to consumer criticism because of the Amazon acquisition. More consumers are vocalizing their dissatisfaction with shopping at Whole Foods, which some feel caters too strongly to Prime members, disregarding other grocery shoppers.
  • Amazon has been building a roster of hospitals supplies and can now sell you the units that comprise a “smart” hospital room. This is the company’s latest foray into a market previously dominated by group purchasing organizations (GPOs). Amazon is attempting to establish a competitive edge against GPOs by cutting prices and offering hospitals greater transparency about product costs.