Late last week, Amazon revealed the coronavirus pandemic has put a strain on both its inventory and logistics infrastructure. The company stated the COVID-19 outbreak had prompted an increase in online shopping that caused shortages in its supply of “household staples.” The e-commerce giant also admitted its “delivery promises are longer than normal.”
Compounding matters, Amazon suffered a glitch in its internal network that affected its ability to assign delivery drivers to Prime Now, Amazon Fresh, and Whole Foods orders on Sunday.
Coronavirus Causing Surge in Panic Buying
The Los Angeles Times recently reported America’s grocery stores are under strain due to the coronavirus outbreak. U.S. consumers are stocking up on groceries and household items in fear of future shortages. Major retailers like Walmart have reduced hours to restock goods and sanitize their shelves. As the nation’s largest electronic marketplace, Amazon has also been affected by the onset of panic buying.
The platform’s selection of everyday household staples like toilet paper and bottled water is sparse and constrained. Bloomberg stated the COVID-19 pandemic has also taxed the firm’s grocery services. Indeed, clicking on the site’s “Whole Foods” tab reveals a warning about limited inventory and delivery capability.
The Big Tech giant employs a massive 250,000 person workforce to maintain its United States delivery infrastructure. The company serves 150 million Prime subscribers via 110 sites scattered throughout the country. Even though the firm spent $12.9 billion to expand its logistics network in 2019, its market footprint has increased alongside its fulfillment capacity.
Founded as an online bookstore in 1994, Amazon made a significant entrance in the supermarket sector in 2017 when it bought Whole Foods. Though it doesn’t make the U.S. top five by revenue, the firm generates nearly $16 billion in grocery sales annually.
The Burn-In has covered the conglomerate’s recent efforts to expand its presence within the industry.
Last October, the firm made its Amazon Fresh grocery delivery service free for Prime members. One month later, the company announced plans to open a chain of stores in Los Angeles, Chicago, and Philadelphia. In February, the firm opened a 5,000 item cashierless checkout Amazon Go shop in Seattle.
Amazon’s Multipronged COVID-19 Problem
Amazon’s newfound fulfillment problems aren’t entirely the result of the recent explosion in online orders.
The coronavirus pandemic has diminished the conglomerate’s operational capacity. Last week, the corporation told its corporate staffers to work from home if possible. In addition, the company provided its logistics workers with two weeks paid sick leave and unlimited unpaid time off during March.
Amazon also tasked some of its remote staffers to purge gouging merchants and products falsely claiming to cure COVID-19 from its platform. Simultaneously, the corporation is working to help its sellers who maintain their production capacity in China. The Sino nation’s factories, ports, and ground corridors still aren’t back at full strength, which is affecting its merchants’ inventory.
Despite being one of the nation’s largest retailers, a deluge of orders, diminishing inventory, and delivery slows are problems big enough to slow even Amazon down.