Amazon (AMZN - Free Report) has recently faced delivery delays due to a technical hindrance. This impacted orders via its Whole Foods and Amazon Fresh delivery services.
Notably, the company is witnessing a flurry of orders driven by customers’ unwillingness to visit offline stores on fears of contracting the novel coronavirus. Although the company’s delivery capacity remains constant, overflowing orders have been slowing down delivery.
This remains a major concern for the e-commerce giant and might lead to disruption as it might lose customers due to delivery delays in this coronavirus-induced crisis.
Therefore, the company has already started offering concessions to the affected customers in order to retain them on its online shopping platform.
Further, it is making strong efforts to expand delivery capabilities in order to sustain customer momentum in this crisis situation.
Anti COVID-19 Initiatives
COVID-19, which has become pandemic, is compelling people to stay at their homes. This, in turn, is resulting in problems as they are unable to procure items required on a daily basis.
This is leading to an increase in the Internet and online services usage, which underscores the importance of online shopping and quick delivery services.
Although Amazon is facing hurdles in delivering packages on time, its strengthening delivery services remain noteworthy.
We note that the company has recently taken an initiative to bolster its Same-Day Delivery program by making same-day delivery service available in the cities of Philadelphia, Phoenix, Orlando and Dallas for Prime members.
Further, the service in these cities has been equipped to deliver three million items across various product categories. The company has also built mini-fulfillment centers, which are first of their kind buildings.
Notably, the new facilities are located closer to customers, which is likely to help Amazon to reduce the number of hours taken to deliver orders via same-day delivery services.
We believe the latest move is anticipated to help the company manage the increasing number of orders during the coronavirus crisis.
Apart from this, the company’s one-day shipping and many other fast delivery services remain noteworthy and are likely to instill investor confidence.
Additionally, the company is creating a relief fund worth $25 million in order to help its independent delivery drivers and seasonal employees during the corona scare.
All the above-mentioned strong endeavors reflect Amazon’s commitment toward the betterment of customers, which in turn is likely to drive customer momentum. Moreover, the relief fund move indicates its focus toward the welfare of its workers as well.
We believe these endeavors are likely to aid Amazon in gaining investor confidence in this volatile stock market, thanks to the coronavirus outbreak.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #3 (Hold).
A few better-ranked stocks that can be considered in the retail-wholesale sector are Stamps.com (STMP - Free Report) , eBay (EBAY - Free Report) and Fiverr International (FVRR - Free Report) . While Stamps.com and eBay sport a Zacks Rank #1 (Strong Buy), Fiverr carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Stamps.com, eBay and Fiverr is currently pegged at 15%, 11.25% and 44.18%, respectively.
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