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How powerful will Amazon be after the pandemic? | Amazon

It’s Someone’s Nightmare Job: Amazon Boss Jeff Bezos’ Diary Washington Post, is looking for a special correspondent just to cover the billionaire’s online shopping and web services titan.

Having your own columnist might be considered the height of billionaire selfishness, but we’re all close watchers of Amazon now.

The group’s tentacles have spread into so many areas of our lives that it’s almost impossible to escape – from its cloud storage technology that supports government services and many businesses, to its subscription service Prime that ties customers into an “ecosystem” that ranges from movies and music to grocery deliveries, to Alexa-driven smart speakers that turn on lights and radios in many homes and search the internet while recording intimate user data.

Covid-19 may have dented sales and profits for many businesses, but Amazon has been a standout winner of the pandemic, attracting millions of new recruits who have turned to streaming and online shopping while protecting themselves at home.

In Britain, 56% of households would now have access to Prime Video after nearly 700,000 more people signed up in the last quarter of last year, according to Kantar analysts.

On Thursday, Amazon will reveal how well it has been able to retain these new customers as high streets reopened as the costs and complexity of serving shoppers increased.

Widespread supply chain lockdowns, with some factories closed during Covid alerts and shipping routes disrupted, are expected to have affected its ability to source and deliver products. The cost of delivery has also increased as Amazon has struggled to recruit staff and invest in additional logistics kit amid a global surge in demand for home deliveries. In the UK, it has raised wages for warehouse workers and offered hiring bonuses of up to £3,000 before Christmas to attract staff, as well as over £11 an hour in some parts of the UK. country – three pounds more than the current one. minimum wage.

Meanwhile, shoppers are now more likely to try on clothes in boutiques, go on vacation or venture to bars and clubs, which means less money to spend on Amazon.

Such problems have already affected the stock prices of tech companies, from online fashion sellers Asos and Boohoo to streaming service Netflix.

At Amazon, difficulties led to a disappointing performance in the three months to late September, when the company reported its biggest year-over-year profit decline since 2017. Another drop is expected for the quarter. of Christmas.

Overall, analysts expect fourth-quarter revenue of $137.7bn (£102.8bn) and operating profit of $2.6bn : A more than 9% increase in revenues compared to the same period a year earlier, but a sharp drop of 60% in quarterly profits.

Costly investments in freighter chartering and aircraft leasing should have given Amazon some degree of protection against global supply chain issues. However, almost a third of its parcels are delivered by partner companies.

Michael Pachter, analyst at Wedbush, said: “Industry-wide shortages in shipping containers, truck drivers and readily available ports have likely impacted delivery times and caused voltages for many orders as shipping containers. [rates] went from less than $2,000 before the pandemic to more than $20,000 with delays of several weeks.

Amazon’s first ‘Just Walk Out’ store in the UK, in Ealing, West London. It has now opened 15 branches. Photography: Guy Bell/Rex Shutterstock

On the demand side, it is not simple either. In groceries, for example, Natalie Berg, retail analyst and co-author of a book on Amazon, says: “All the things that made Amazon unique, like same-day delivery and stores without checkout, quickly become the norm.”

In the booming world of fast groceries, Getir, Gopuff and Gorillas promise to deliver in less than 15 minutes and are battling with Amazon partner Deliveroo and rivals Just Eat and Uber Eats, as well as Sainsbury’s Whoosh and Chop Chop UK.

Meanwhile, Amazon has opened around 15 of its checkout-less ‘just on foot’ grocery stores in the UK, but it already faces a challenge in this area from Tesco and Aldi – and stiff competition from regular local convenience stores. A tie-up with Sainsbury’s, which uses Amazon technology to power its direct-access store, could suggest a more lucrative way forward.

Don’t be surprised if Amazon is also bringing high-tech brick-and-mortar fashion stores to the UK before long. If shoppers are keen, the tech giant’s real assault on the high street will come by teaming up with more familiar brands with better fashion credentials.

All of this will fuel the appetite for dominance by big tech companies. In the United States, a regime change is being led by Lina Khan, the new head of the Federal Trade Commission, who has made a name for herself helping to guide investigations into monopoly technological power, particularly Amazon.

Historically, the takeover of monopolistic companies has been a slow and arduous process. But Khan showed her ambition at the first meeting she chaired last summer, saying the United States needed “a different set of rules” to control big tech.