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Amazon Reveals Holiday Sales: Cyber Monday Orders Rose 39%


Amazon Reveals Holiday Sales: Cyber Monday Orders Rose 39%

Photograph by Chris Ratcliffe/Bloomberg

In what is now a post-Christmas tradition, Amazon.com (AMZN), the largest online retailer, opened some of its own gifts—sales figures from the holiday season. While the company’s disclosures were maddeningly selective and omitted any mention of the last-minute delivery snafus by shipping partners FedEx (FDX) and United Parcel Service (UPS), the data are nonetheless revealing.

Amazon said its customers ordered 37 million items on Cyber Monday, its busiest shopping day of the year. That figure is a healthy 39 percent higher than last year’s peak day. Although Amazon operates its website in only about a dozen countries and languages, it says it shipped to 185 countries over the holidays.

Perhaps most interestingly, the consumer shift to smartphones appears to be boosting Amazon’s sales. More than half of customers shopped on their mobile devices, the company said. Despite the efforts of rivals such as Best Buy (BBY) to halt the practice of showrooming—browsing in stores while buying online—customers can’t seem to help themselves from clicking as they walk the aisles, says Colin Sebastian, an analyst at Robert W. Baird. “While Amazon does not disclose specific Mobile commerce volume, we estimate that more than $20 billion of merchandise was purchased on Amazon this year via smartphones and tablets,” Sebastian says. “We believe the new data suggests that many Amazon customers are frequently ‘show-rooming.’”

The disclosures say as much about how Amazon views its own business as the health of its operations. Prime, the $79-a-year, two-day shipping service, occupied the headline of Amazon’s post-holiday report and was the subject of most of the statistics. (Last year’s press release trumpeted “customer satisfaction.”) More than 1 million customers became new Prime members in the third week of December, the company said, and it revealed that it had to limit the creation of new Prime memberships during peak periods to ensure service to current members “was not impacted by the surge.”

It’s unclear how Amazon was able to restrict new Prime signups. A spokesperson did not immediately return a request for comment. Sebastian estimates that Amazon has more than 20 million subscribers to Prime, and they tend to concentrate their spending on the site and buy twice as much as non-Prime members. Prime, which helps cement customer loyalty and insulate Amazon from price competition, seems to sit squarely at the center of the company’s plans for the future.

Amazon has always demonstrated a flair for inventing ways to measure itself, and it didn’t disappoint in that regard. The company trumpeted average response times on its Mayday service—a feature of the new Kindle Fire HDX tablets that let customers conduct a live video chat with a customer support rep. Average response time was 9 seconds, Amazon said, besting the company’s own goal of 15 seconds. Of course, that might indicate that fewer people than expected bought Kindle Fires this year or that fewer than expected were using Mayday. Amazon wouldn’t say. Still, many analysts believe Amazon could extend the service to other devices, such as a coming set-top box or smartphone, or even to its retail website.

Finally, Amazon’s hard-working department of wackadoo statistics contributed some “fun facts” that are largely inexplicable. The company says customers ordered enough upright vacuums that “end-to-end, they would reach 15 times the depth of the Marianas Trench, the deepest point in Earth’s oceans.” Customers bought a volume of Nylabone Dinosaur Chew Toys equal to the height of 950 T-Rexes. And they purchased enough Rainbow Looms from sellers on the Amazon third-party marketplace that the toys’ rubber bands—which I happen to know scatter easily into every available couch cushion, crevice and carpet—“can stretch around the circumference of the Earth.”

Stone_190
Stone is a senior writer for Bloomberg Businessweek in San Francisco. He is the author of The Everything Store: Jeff Bezos and the Age of Amazon (Little, Brown; October 2013). Follow him on Twitter @BradStone.

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Companies Mentioned

  • AMZN
    (Amazon.com Inc)
    • $332.97 USD
    • -2.81
    • -0.84%
  • FDX
    (FedEx Corp)
    • $150.6 USD
    • -0.03
    • -0.02%
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