During a recent internal all-hands meeting, Amazon's retail CEO Doug Herrington said that the everyday essentials business, which includes health, beauty, and grocery products, is "growing 50% faster than the rest of the store." This noteworthy increase highlights how quickly targeted product categories can gain traction when coupled with strategic logistics initiatives.
Herrington stated, "It has really supercharged our grocery and everyday essential business," referring specifically to accelerated shipping speeds. This innovation, according to him, particularly benefits low-priced everyday items that are commonly purchased by households week-to-week.
Amazon's endeavor to regionalize its delivery network aims to enhance delivery speed while reducing costs. This evolution is significant, as it aids in providing cheaper products with thin profit margins, suggesting a strategic pivot in Amazon's operational tactics.
Historically, Amazon viewed lower-cost products as 'CRaP'—'can't realize a profit'—due to high shipping costs. The current strategy, however, is a marked departure, allowing entries into competitive markets by positively embracing the sale of these essentials.
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