In an earnings call on Thursday, Amazon’s first-quarter revenues increased by 17 percent year-over-year to $59.7 billion. This was in line with what analysts expected and was at the high end of guidance for revenue between $56 billion and $60 billion.
There was some deceleration in growth from 20 percent in the fourth-quarter of 2018 and 29 percent in last year’s third quarter. This can be attributed to the slower growth of Whole Foods. However, revenue growth has also decelerated in other areas, including third-party seller services, subscription services, and even Amazon Web Services (AWS), according to the Motley Fool.
One-day shipping to be standard
Amazon Prime members have gotten used to two-day shipping – but along with a great earnings report on Thursday, Amazon also announced it will be making one-day shipping the standard for all Amazon Prime members. The e-commerce giant will spend $800 million during the second quarter of this year to improve its warehouses and delivery infrastructures to make this possible.
This move raises the bar for Amazon’s competitors, chiefly Walmart and Target to offer faster and cheaper shipping for online purchases. Target shares were down more than 5 percent Friday morning. Walmart shares tumbled 2.5 percent, according to CNBC.
Amazon has over 100 million Prime customers in the U.S. and it is estimated that the company reaches over 50 percent of American households today. With Amazon’s growing momentum, customers will soon be getting used to having something they order on the Internet delivered to their doorstep in 24 hours or less.
“Just as Amazon did with Prime 2-day delivery 14 years ago, we see a broad-based 1-day shipping offering increasing consumer e-commerce expectations (essentially more people will get used to 1 day vs. 2-day shipping … and grow to expect 1-day shipping),” Morgan Stanley analyst Brian Nowak said in a research note.
