Doug Herrington, CEO of Amazon’s retail division.
Amazon’s delivery speeds have slowed significantly since the pandemic, leaving many customers waiting days and sometimes weeks for their packages to arrive.
But Doug Herrington, the company’s head of retail, is coming into 2023 with dramatic improvements to make shipping faster than ever before.
Insider has obtained audio from Amazon’s general meeting in mid-February 2023. At the meeting, Herrington said that the speed of delivery could be improved by reviewing various aspects, such as cost structure and inventory management.
“This year is going to be a year of some ‘firsts’ for us. We will lower our service costs like never before and get our products to our customers faster than ever before.”
Herrington’s bold promise comes after repeated complaints from Amazon customers about slow shipping speeds in recent years. I often see Amazon customers pointing this out on social media.
An informal investigation by a former employee in 2022 found that when Amazon promised two-day delivery to Prime members, it usually took five. Amazon is currently facing a class action lawsuit in federal court over its two-day shipping guarantee for Prime members, alleging “false advertising” and “negligent misrepresentation.”
Herrington then hinted that the company is looking to improve efficiency across Amazon’s delivery network, which has been hit hard by labor and logistics issues since the pandemic. Amazon CEO Andy Jassy said in early February that the company is focusing on optimizing the cost and efficiency of its transportation network after scaling back its expansion plan for 2022.
An Amazon spokesperson responded to an Insider inquiry by email, saying the company’s general shipping speeds in 2022 will improve from the previous year, and that trend will continue in 2023.
“Our efforts to deliver Prime delivery speedily without delay are improving from 2021 to 2022, and from 2022 to 2023,” said a spokesperson.
Two big top priorities
Herrington said at a conference in mid-February that improving shipping speed was one of the “two top priorities” for Amazon’s retail business in 2023. The other is the reduction of product sales and delivery costs.
Shipping speed is “most important and representative” for customer convenience, Herrington said, and shoppers are more likely to buy when their orders arrive sooner, which “encourages further growth” for Amazon. .
As such, in 2023, the company will spare no effort to further leverage its extensive warehouse network. Having hundreds of warehouses across the U.S. allows the company to store products closer to populated metropolitan areas, which in turn helps speed up delivery and reduce costs.
Currently, Amazon is working with sellers and vendors to increase the inventory it holds in each region and to ensure product availability. We are also working with several teams within the company to make it easier for people to find products in search on Amazon’s website. This would allow customers to find out if a store near them is in stock and which products are likely to arrive in the shortest time. These measures will help Amazon customers get the “fastest and cheapest” products, Herrington said.
“We’re going to be able to do that by rethinking how we connect fulfillment centers with customers, using the delivery system we’ve built over the last few years,” Herrington said.
Herrington says two priorities for 2023—faster delivery and lower costs—are critical to Amazon’s future success. Reducing costs is important because it allows Amazon to offer lower prices to its customers, which in turn leads to more products for sellers to sell on Amazon. He added that lower sales and delivery costs would allow the company to invest more in speeding up deliveries.
“By doing these two things, we can continue to invest, not just this year, but for years to come, and continue to improve our selection, pricing, and convenience,” Herrington said.
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(Translated and edited by Sayuri Daimon)
Source: BusinessInsider
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