Amazon's (AMZN) Lyft Deal Boosts Efforts to Fight Coronavirus
Amazon AMZN is making every effort to strengthen retail services in order to cater to customers amid the coronavirus pandemic.
This is evident from the company’s recent partnership with ride-hailing company Lyft LYFT. Per the deal, Lyft has asked its drivers to consider job opportunities at Amazon as means of additional income. These comprise delivery drivers, warehouse and shopper jobs.
This tie-up seems to be a win-win situation for both the companies in this challenging situation where people are being asked to practice social distancing in a bid to curb the spread of the coronavirus.
Lyft and its drivers have been impacted severely by slowdown in the demand for ride hailing services. Thereby, opportunities at Amazon will help these drivers in earning extra during this crisis situation. Notably, Amazon is paying $17 per hour for the warehouse and shopper jobs.
Further, Lyft drivers are getting options to join as either Amazon Flex delivery driver or delivery service partner (DSP) driver.
Meanwhile, with more warehouse workers and delivery drivers, the e-commerce giant will be able to meet the flurry of online orders it has been facing for past few weeks. This can be attributed to customers’ unwillingness to visit offline stores on fears of contracting the deadly virus.
All these will help the company in sustaining customer momentum during this challenging situation. This, in turn, will help the stock in gaining shareholders’ confidence
Coming to the price performance, Amazon has returned 8.8% over a year against the industry’s decline of 1.8%.
Amazon’s Retail Strategies to Combat Coronavirus
Although Amazon’s delivery capacity remains constant, overflowing orders have been slowing down deliveries of groceries and other essential goods packages.
We note that the company will be able to improve its delivery timings with the aid of Lyft drivers, which in turn will help it in managing disruptions caused by COVID-19 outbreak. Hence, the latest partnership remains a major positive.
The company has taken other measures on the retail front apart from the latest move to combat this contagious virus. Its Whole Foods stores in the United States, Canada and United Kingdom, will dedicate an entire hour to serve only senior citizens in an attempt to keep them safe from crowd as they are more susceptible to COVID-19 infection.
Additionally, Whole Foods stores are closing two hours earlier in order to sanitize the stores and restock the shelves.
Further, the company has taken an initiative to bolster its Same-Day Delivery program by making same-day delivery service available in the cities of Philadelphia, Phoenix, Orlando and Dallas for Prime members.
Further, the company has built mini-fulfillment centers, which are first of their kind buildings. Notably, the new facilities are located closer to customers, which is likely to help Amazon to reduce the number of hours taken to deliver orders via same-day delivery services.
Additionally, Amazon has recently announced plans to hire 100,000 warehouse and delivery employees.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. revenue-ttm | Amazon.com, Inc. Quote
Retailers’ Ramping Initiatives
With the current home-isolation scenario, not only Amazon but also other retailers like Walmart WMT, Kroger KR, Dollar General and Albertsons among others are also on hiring spree in order to cater well to the spiking customer demand.
Notably, Walmart is looking to temporarily hire 150,000 workers across its stores, clubs and distribution centers. Moreover, the company has also rolled out an hour-long senior shopping event that will happen on every Tuesday across its over 5,000 stores in the United States one-hour prior to opening for general customers.
Further, Kroger is also planning to hire 10,000 new workers. Dollar General has also announced plans to hire roughly 50,000 workers by April end. Meanwhile, Albertsons is employing 30,000 new employees.
Nevertheless, Amazon’s strengthening retail endeavours to deliver better shopping experience to customers are likely to keep it ahead of the pack.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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