Even in his new position, Jeff Bezos will prioritize groceries.
In the third quarter of fiscal 2021, Jeff Bezos will step down as CEO of Amazon.com, Inc. and become executive chairman. This will enable him to lead key decisions regarding acquisitions, Amazon’s overall strategy, and the company’s move into the grocery business, among other things. The fact that grocery remains a top priority for Mr. Bezos and Amazon highlights its continued significance to the biggest online retailer in the world and suggests more significant shifts to the market may be forthcoming.
During a conference call on February 2 to discuss the company’s fiscal 2020 earnings—which showed some dramatic results—the remark about “going into grocery” was made. In comparison to the previous year, when the company earned $11.6 billion, or $23.46 per share, Amazon.com’s net income for the year ended December 31, 2018, increased by 84% to $21.3 billion, or $42.64 per share on the common stock.
With net sales of $386 billion in fiscal 2020, compared to $281 billion in fiscal 2019, there was a notable increase in net sales.
The remark about “going into grocery” also put an end to rumors that Amazon’s next CEO, Andrew R. Jassy, might change the company’s strategic priorities. As the CEO of Amazon Web Services, the business’s quickly expanding information technology division, Mr. Jassy has the potential to lead Amazon in new directions. However, it’s evident that the company’s grocery business is still its top priority.
There is no denying Amazon’s strength in online retailing, and the pandemic has boosted the company’s expansion. The management’s openness to experimenting with novel brick-and-mortar store designs further enhances its abilities. Customers can shop and make payments using the Amazon Go and Amazon Go Grocery apps without using the conventional checkout line. According to the company, Amazon Fresh Grocery is another store format that aims to provide customers with a seamless online and in-store shopping experience.
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More and more people are realizing that Amazon is becoming the industry leader in groceries. The annual Retailer Preference Index, which ranks the retailers most likely to succeed with customers over the long run, was released in January by data science company Dunnhumby. Amazon, which came in third last year, took the top spot for the first time.
This year’s index included what Dunnhumby termed COVID momentum, which compared a retailer’s financial performance during the pandemic to its pre-pandemic performance, in addition to traditional characteristics like pre-COVID financial performance, consumer engagement, and trust.
According to Dunnhumby, “it is evident why Amazon is first this year when looking at their strengths.” “Amazon has a strong value core and is clearly the retailer with the best price, ranking 11th out of 56 retailers in our study on price. Additionally, they rank first in digital and second in speed, two of the key preference drivers for COVID momentum.
COVID-19 produced a “perfect storm that played right into the unique strengths of Amazon’s customer value proposition,” according to Dunnhumby. Mr. Bezos’s goal in his new position is to build on these advantages and solidify Amazon’s position as the industry leader in food and beverage retailing.