Just as it made two-day shipping the standard for e-commerce, Amazon changed the game—and the benchmark—yet again in 2019, and that’s just the tip of the iceberg for digital retail’s de facto pacesetter.
Getting packages to customers in 48 hours just doesn’t cut it anymore in today’s instant gratification culture, and Amazon responded in kind by promising Prime members free shipping in just one day. And though the shipping shift requires an $800 million investment, one analyst believes speeding up delivery could pad the Seattle firm’s coffers to the tune of $24 billion in incremental revenue. Fortune 1 rival Walmart quickly rolled out its own one-day shipping guarantee shortly after—a testament to how fiercely the twin titans are battling for the hearts and wallets of the buying public.
Long accused of allowing counterfeits to proliferate on its popular platform, Amazon found itself facing even more intense scrutiny this year when the American Apparel and Footwear Association petitioned the United States Trade Representative to add certain of the digital retailer’s foreign websites to a list of Notorious Markets—that is, known bad actors accommodating purveyors of frauds and fake goods that materially harm legitimate brands. However, Amazon clapped right back, pointing out that many brands have “refused” to make use of its suite of purpose-built anti-counterfeiting tools, including Project Zero and IP Accelerator, which give companies greater control over their intellectual assets.
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That persistently pervasive problem with counterfeits has kept some brands from selling their wares on Amazon, and yet many well-known labels have succumbed to the lure of the site’s vast scale and reach. That’s why Nike sent shock waves through the industry when it decided to end a “pilot” during which it sold clothing and sneakers directly on Amazon in order to nurture relationships with “premium” partners like Foot Locker.
Soon after, a smaller footwear brand said it, too, would sever ties with Amazon for certain of its products—prompting many to question whether a wholesale brand exodus would follow, though that has yet to come to fruition.
Amazon’s struggle to police products offered by third-party sellers exploded into the news cycle with revelations that clothing produced in blacklisted Bangladesh factories made their way onto its platform. Shortly after, the holiday season brought fresh outrage when ornaments depicting Nazi-run concentration camps were found for sale (after Amazon’s U.K. website had been selling clothing showing a Hitler minion executing a Jew kneeling in a mass grave).
Amazon can plead ignorance when sellers hawk questionable goods but the tech firm drew major side eye from Allbirds for selling a private-label dupe of the cult label’s wool-based sneaker for less than half its $95 price tag. “Given what I know about manufacturing, there is no way you can sell a shoe for that low while taking care of all of the environmental and animal welfare considerations and compliance we take into account,” co-founder and CEO Joey Zwillinger said. “Amazon is stating that it wants to be a green company. It should be taking steps to make their products more sustainable.”
A sustainably sourced in-house Amazon brand landed on a list of the labels consumers flocked to on the e-commerce platform this holiday (which, like each seasonal event, just keeps getting better and better) but there’s little evidence the company has been seriously investing in giving shoppers eco-friendly clothing and footwear. Instead, Amazon’s eco efforts have been focused on cleaning up its logistics and supply chain, and it helped to spearhead The Climate Pledge to meet the 2050 Paris Agreement targets—10 years ahead of schedule.
Putting its money where its mouth is, Amazon detailed new renewable wind and ssolar energy investments in the U.S. and in Europe that further its goal of transitioning away from fossil fuels to 100 percent sustainable energy by 2030.
The company has also found sustainable solutions for sellers, after it was caught landfilling perfectly good product. Under the new Fulfillment by Amazon Donation program, excess or returned seller product will be donated by default to groups including Good360 in the U.S. and Newlife, Barnardo’s and Salvation Army in the U.K., though vendors are allowed to opt out.
Amazon’s reign as retail’s singular bogeyman could be coming to a close—if a First Insight report holds water. Research from the retail decision-making and “voice of the customer” platform indicates that Prime members aren’t purchasing as often as they used to, and the company’s membership ranks in general are showing marked signs of attrition. And while consumer preference for Amazon has waned in recent years, the report claims, Walmart seems to be gaining in customer affinity.
Plus, the antitrust backlash against Amazon gathered steam in 2019, as Europe and the U.S. put the behemoth firmly in the hot seat. Confirming rumblings and rampant speculation, Amazon was outed as leveraging an algorithm that promoted its private labels ahead of competitor products, though it denied these allegations. Despite settling German and Austrian antitrust probes, Amazon still faces European Union scrutiny in how its uses—or abuses seller data to its benefit.