On July 30, Amazon announced its financial results for Q2, which ended on June 30, 2020. Despite spending a staggering $9 billion on capital improvement projects and over $4 billion in incremental COVID-19 related costs, the company almost doubled its revenue and profit numbers during the quarter.
Two major areas of success were online grocery shopping and delivery and Amazon Prime video viewership. This makes sense, as consumers across the world have been impacted by stay-at-home mandates and social distancing guidelines triggered by COVID-19. “The COVID-19 pandemic and stay-at-home lifestyle has accelerated the trend toward online grocery sales,” commented Raymond Pucci, Director of Merchant Services at Mercator Advisory Group, in a recent article.
To support its customers during COVID-19, Amazon tripled the number of grocery pickup locations and increased delivery capacity by 160%. Consequently, online grocery sales tripled in Q2 compared to the same period in 2019.
Meanwhile, Prime Video viewership hours doubled. Video streaming services are by far the most popular form of online subscription services, with Mercator Advisory Group finding that 46% of consumers are subscribed to a video streaming service. 70% of U.S. households were subscribed to at least one streaming service in 2019.
Additionally, Amazon now has more than 1 million regular and seasonal employees, and that number is anticipated to grow. According to Amazon founder and CEO Jeff Bezos, “this was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe… We’ve created over 175,000 new jobs since March and are in the process of bringing 125,000 of these employees into regular, full-time positions.”
Amazon’s Q2 2020 numbers exceeded Q4 2019. This is significant because Q4 is typically the company’s largest volume quarter for retail business. This means that Amazon may do even better in the second half of the year, even as other companies struggle to stay afloat during the pandemic.