Online giant Amazon has had a good pandemic and effectively put into practice the maxim that crisis can spell opportunity.

Amazon’s net sales soared 40% to $88.9bn in the second quarter running to June 30. Net income doubled to $5.2bn even though the goliath from Seattle bore $4bn of pandemic-related costs.  

Amazon hired 175,000 people over the quarter and 125,000 of them are expected to stay on full-time – testament to the scale of growth as the world reeled from the impact of Covid-19.

“Capitol Hill interrogators failed to lay a glove on Jeff Bezos and there is no reason to think customers will change their behaviour in the slightest”

The retail industry reeled too as stores other than food shops and other providers of essential goods went into lockdown around the globe, cutting off the revenue channel that still accounts for the majority of business for most.

Amazon’s model, including a vast assortment of products and ultra-reliable delivery, could not have been better suited to the emergency conditions that people the world over found themselves living in.

But Amazon has not been content to sit back and let the money flow in. The etailer is stepping on the gas, determined to extend its offer and reach.

In the UK, there have been three big developments. Amazon launched free grocery deliveries for its Prime members, signalling its continued determination to grab share in the food market. It finally won approval to take a stake in food delivery specialist Deliveroo, which has also built up business during the pandemic. And it emerged that the etailer will open a chain of cashierless Amazon Go shops.

Food supply and contactless stores are both perfectly placed to tap into unsettled conditions, amid local lockdowns in Scotland and the north of England, and nervousness about a second wave of coronavirus.

Don’t despair

All this is happening as Amazon faces increased scrutiny from legislators. In the same week as it reported its quarterly results, founder Jeff Bezos appeared before a US Congress hearing where he was quizzed on everything from competition concerns to counterfeit goods. 

However, his Capitol Hill interrogators failed to lay a glove on Bezos and there is no reason to think the voters who really matter to retailers – paying customers – will change their behaviour in the slightest. They love the value, convenience and dependability of delivery that Amazon provides.

Other retailers might feel powerless in the face of Amazon’s relentless march. The default approach adopted by many in recent years was not to attempt to replicate what Amazon does – essential as an online element might be – but instead focus on ‘doing what Amazon can’t’

“One big message that should not be missed is that Amazon thinks, regardless of what is happening at present, that a bricks-and-mortar presence is still going to matter in the future”

Often that revolved around store enhancements such as more experiential elements, the provision of services and higher service standards. The appeal of some of those strategies, particularly in-store experience, has evaporated during the pandemic.

But Amazon’s rivals need not hang their heads in despair. There are new ways their operations can be adapted to reflect changed conditions.

Convenience, for instance, is not limited to online specialists, nor even to the c-stores that have also been the beneficiaries of big sales during coronavirus. 

There are opportunities to widen what can be conveniently offered to shoppers, particularly by better integrating online and bricks and mortar so that shops play a much bigger role as collection rather than sales points. Next has done that well, while also benefiting at the other end of the chain by processing returns in-store. Putting stores at the service of the digital proposition is also at the heart of John Lewis’ new strategy.

There may well be opportunities in formerly Cinderella locations too. As neighbourhood shopping takes on greater importance, stores that once lived in the shadow of their big-city counterparts can play a larger, different role.

New shops, new purpose

While it may be the technological trailblazer, Amazon has no monopoly on contactless payment options. Marks & Spencer has rolled out checkout-free shopping to more than 300 food stores. Sainsbury’s has also rolled out its SmartShop contactless scheme and introduced virtual queuing.

Such initiatives not only help address health and safety concerns but should – if implemented properly – enable store staff to focus more on improving the store experience in its widest sense, whether through better keeping the shelves stocked, advising customers or making collection more speedy and efficient.

Retailers must up their game now. Because one big message that should not be missed is that Amazon thinks, regardless of what is happening at present, that a bricks-and-mortar presence is still going to matter in the future. It is understood to be planning about 30 Go openings.

This should be the time for other retailers to learn lessons from Amazon where they can but adapt their own chains at pace. That is where many longer-established retailers have decades of expertise. They should be reinventing stores before Amazon does. As store lease renewal costs come down for many retailers, there is an opportunity to put new shops to new purpose.