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HUB-Supply Chain Supply Chain Industry Updates

Amazon Doesn’t Expect E-Commerce Boom to End Any Time Soon

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In a measure of just how much the pandemic has accelerated the growth of e-commerce, Amazon revealed plans to dramatically increase its brick-and-mortar footprint in 2020 to support its busy supply chain.

In a recent call with investors, Amazon CFO Brian Olsavsky said more people bought from the e-tailer between April and June than during the previous November and December, traditionally the busiest season for Amazon (and most others). To keep up with continuing demand, the company plans to greatly increase its fulfillment center infrastructure in the second half of 2020.

“In 2019, we increased network square footage by approximately 15%,” Olsavsky said, according to Business Insider. “This year, we expect a meaningfully higher year-over-year square footage growth of approximately 50%. This includes strong growth in new fulfillment center space as well as sort centers and delivery stations. We expect the majority of this capacity to come online in late Q3 and into Q4.”

Amazon’s announcement comes at a time when many traditional retailers are essentially moving in the opposite direction and announcing store closings, a trend that was underway long before COVID-19 struck.

“That massive investment into opening new fulfillment centers suggests that Amazon doesn’t believe the pop in online ordering is a trend that will track with the rise and fall of COVID-19,” Business Insider reported. “Rather, [Jeff] Bezos and his executive team believe the [shopping] habits folks are picking up right now are going to stick around.”

Amazon’s news is in line with a projection from Prologis that e-commerce growth will continue to power the need for additional warehouse space.

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