Amazon recently announced its quarterly earnings and one of the points that stood out was when CFO Brian Olsavsky revealed that the company is going to reduce two-day shipping for Prime users to one-day for free.
“Our goal is to evolve the two-day free shipping program to a one-day free shipping program,” said Olsavsky.
To make this happen, Amazon is going to spend about $800 million in its fulfillment and transportation capacities. It is unknown when this change will occur, but Amazon is going to actively work on this project throughout this year in order to make it happen by the holidays.
Amazon recently dropped a $35 minimum for one-day deliveries and the company also added more items for the one-day selections. And in a number of markets, Amazon offers same-day and one-day shipping options along with two-hour deliveries through Prime Now.
“We’ll be building most of this capacity through the year, in 2019,” Olsavsky added. “We expect to make steady progress quickly and through the year.”
Amazon has been facing pressure from its competition as Walmart, Target, and Best Buy have been offering faster shipping times at lower costs. And the growth rate of the Amazon Prime base is believed to have slowed down following a $20 price increase to $119 per year about a year ago.
Some of the other perks included with Amazon Prime includes Prime Shipping, Prime Now, Prime Video, Prime Music, Twitch Prime, Prime Reading, Amazon Photos, and Amazon First Reads. Amazon Prime has more than 100 million members worldwide.
Amazon revealed larger profit margins, but slower growth in its earnings. Total revenue increased by 16.9% year-over-year — which is the slowest growth that the company saw since 2015. Amazon’s ad business in the “other” category grew 34% to $2.7 billion compared to more than 60% over the past five quarters. Amazon’s physical stores including Whole Foods increased 1% year-over-year to $4.3 billion. And while Amazon’s cloud services grew 41%, it was still slower than 49% last year.
In terms of profitability, Amazon hit a record $3.6 billion and operating profit was $4.4 billion. Net sales increased 17% to $59.7 billion compared to $51 billion in the first quarter of 2018.
There are more than 30 million active users on the Fire TV streaming service. This means it is higher than Roku’s 27 million.
Recently, Amazon announced the first-ever recipients of the Amazon Future Engineer (AFE) scholarship. AFE is a childhood-to-career program that has a goal of inspiring and educating millions of children and young adults each year from underrepresented and underserved communities to pursue careers in computer science and coding.
The 100 student recipients were each awarded a $40,000 scholarship to study computer science at a college of their choice and a guaranteed paid internship offer at Amazon after their freshmen year of college.
Amazon Future Engineer also announced robotics grants to 100 schools serving students from underrepresented and underserved communities. The schools are going to receive FIRST Robotics memberships and gives each school the opportunity to start their first robotics club, $10,000 from Amazon to expand computer science education at their school, and a tour of a local Amazon Robotics fulfillment center.
“The son of a working single mom, Leo Jean Baptiste grew up speaking Haitian Creole in a New Jersey home without internet access. He’s also one of our inaugural group of 100 high school seniors to receive a $40,000 Amazon Future Engineer scholarship and Amazon internship,” said Amazon founder and CEO Jeff Bezos. “He rose to the top of his class and is set to study computer science at college this fall, with the dream of getting a job in machine learning. Our passion for invention led us to create Amazon Future Engineer so we could help young people like Leo from underrepresented groups and underserved communities across the country. In addition to 100 college scholarships a year, we’re funding computer science classes in 1,000 high schools and counting, and inspiring younger kids to explore coding through coding camps and after-school programs. We love this program, and we can’t wait to see what Leo and his fellow future engineers invent.”
Amazon Alexa now has more than 90,000 skills in the Alexa Skills Store from external developers. And Amazon also recently introduced health and wellness capabilities for developers to build skills for tracking baby activities like diaper changes, sleep, and feedings. And Amazon also rolled out a HIPAA-eligible environment for developers with new healthcare skills from Boston Children’s Hospital, Cigna, and Express Scripts.
Through a partnership with Apple, Amazon now offers Apple Music via Alexa on Fire TV, Echo, and Sonos devices in the U.S. and U.K. Plus Amazon also announced the Apple TV app is coming to Fire TV devices.
