In 2023, Amazon experimented with new logistics strategies and technologies to quickly fulfill and deliver orders — and these changes paid off big for the e-commerce giant.
Amazon shipped last-minute Christmas gifts faster in 2023 than in 2022, according to data from analyst firm Momentum Commerce.
By analyzing two groups of over 500,000 products on Amazon U.S. between December 15th and December 25th, Momentum Commerce found that the share of products with an “Arrives after Christmas” tag in Amazon’s Buy Box in 2023 was 10.2% versus in 2022, where 17.6% of U.S. products on the platform warned it would ship after Christmas.
Amazon, since 2019, has been making heavy investments to make delivery times faster. Last July, it announced plans to double the number of same-day delivery facilities over the next few years. Also in July, Amazon announced that it delivered over 1.8 billion units to U.S. Prime members the same or next day, four times the speed in 2019, according to CNBC.
The faster delivery times this year specifically may be attributed to changes in Amazon’s logistics strategy. In 2022, the company shifted away from national fulfillment to a regionalized network model according to Amazon CEO Andy Jassy.
“Shorter travel distances mean lower cost to serve, less impact on the environment, and customers getting their orders faster. On the latter, we’re excited about seeing more next day and same-day deliveries, and we’re on track to have our fastest Prime delivery speeds ever in 2023,” Jassy wrote in a 2022 letter to shareholders.
Melissa Nick, Amazon’s vp of North American fulfillment, told Modern Retail last year that the company’s regional focus meant Amazon was building same-day fulfillment centers in rural areas and investing $1.2 billion into staffing new robotics centers.
“You’ll continue to see us invest in more rural areas. And when I say rural, we launched in Omaha, Nebraska, we launch Sioux Falls. These are new geographies that we’ve never been in before,” Nick said.
Additionally, the firm has been experimenting with a number of technological improvements, using artificial intelligence to analyze and map delivery routes last year for Cyber Monday, and unveiling its new robotics system Sequoia — which Amazon claims will make identifying and managing store inventory 75% faster than before.
These changes — put in place to increase delivery speed — were put to the test this holiday season as Amazon managed to capture 29% of the global order volume in the two weeks before Christmas, up 21% the week of Thanksgiving and Black Friday, according to Route, a package tracking app.
Beginning in 2020, e-commerce platforms like Amazon were inundated with orders, creating huge supply chain bottlenecks and delivery delays. While e-commerce’s growth has flattened in 2023, Amazon now prepares brands for holiday sales much earlier than before. This new data highlighting last-minute item shipments indicates that the pandemic-induced e-commerce fulfillment crunch has most alleviated.
Brands on Amazon said that sales on the platform this year ran more smoothly and at higher volumes.
Organic Signatures, an apparel brand on Amazon, saw its biggest order volume in the past five years during the 2023 holiday rush. While its CEO, Oren Barnoy, felt the platform could still handle logistics around returns better, he says that the holiday rush ran pretty smoothly on his end.
“Even with cutting advertising back, we saw nice volume,” Barnoy said.