UK retailers are in a “bind” due to lockdown restrictions imposed by Amazon, despite the platform’s announcement last week it would allow non-essential goods back into its warehouses.
Amazon had previously prioritised orders for household staples, medical supplies and other high-demand products as part of its response to the pandemic.
However, slower delivery times during lockdown have forced consumers to “look elsewhere”, Ashley Cooke, an Amazon specialist for Clickthrough Marketing, told the Daily Update today (22 April).
He said:
“UK retailers reliant on Amazon find themselves in a bind. Non-essential stock held by Fulfilment by Amazon (FBA) can still be sold, but slower delivery times mean consumers may tire of delays and look elsewhere.
Cooke claimed that as a result, some retailers were now pulling stock out of Amazon’s warehouses so they can fulfil orders themselves.
Consumer demand hit
However, some SMEs told the Daily Update they are managing to continue to sell on Amazon.
Lisa Lessware and Philippa Doyle, co-founders of ethical clothing brand The Bshirt, said:
“Our initial response was to pause all advertising as we expected sales to halt, but they kept coming at a steady pace.
“We’ve put our ad budget on at a very low level and are able to make sales, which is amazing.”
The SME, who won last year’s Open to Export competition, sent stock to Amazon warehouses in the US which could then be delivered through the Amazon Prime fulfilment service.
They nonetheless decided not to invest significantly in advertising on the platform, saying consumer demand has declined.
Algorithm problems
Companies that have seen increased demand during the lockdown have also been impacted by Amazon’s lifting of restrictions.
The Financial Times reports the unit-by-unit limits imposed were determined in part by algorithms that took into account past sales based on a time not specified by the company.
This means companies that would have been popular during lockdown will be being judged by historical data, rather than a recent surge in demand.
However, Amazon has been able to lift restrictions due its hiring of additional staff and improvements to its social distancing measures, for which it has received criticism.
“The good news is Amazon's announcement today of 5,000 jobs and social distancing improvements, which may improve delivery times when the new staff come onstream,” Cooke said.
