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Amazon: Shoppers are distracted by big news events, like assassination attempt
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Date:2025-04-17 08:24:34
Big news events like assassination attempts, the election and the Olympics are distracting already cautious Amazon consumers looking for cheaper purchasing options, executives for the retail giant said on Thursday.
Amazon's Chief Financial Officer Brian Olsavsky told reporters on a call after the company reported second-quarter earnings that consumers "are continuing to be cautious with their spending trading down."
He added, "They are looking for deals," and noted that lower priced products were selling briskly.
Amazon's online retail business has faced heightened competition from budget retailers like Temu and Shein, which sell a wide variety of goods, direct from China, at bargain-basement prices.
Olsavsky also told reporters it was difficult to make predictions for the third quarter because events like the presidential election and the Olympics in Paris were distracting consumers.
“Customers only have so much attention,” Olsavsky said, according to CNBC. “When high-profile things happen, or the assassination attempt a couple of weeks ago, you see that people shift their attention to news. It’s more about distractions.”
Amazon executives highlight consumer updates
Here are some other consumer updates from Amazon's call:
- Faster deliveries: Amazon delivery for Prime customers has been "faster than ever before, with more than 5 billion units arriving the same day or next day," said Amazon CEO Andy Jassy. Fast delivery will continue to improve as Amazon stocks more inventory regionally and at fulfillment centers "closer to where our customers are."
Consumers are buying more everyday essentials, including nonperishable foods as well as health and personal care items, Olsavky said. "Prime members continue to increase their shopping frequency while growing their spend on Amazon."
- Expanded benefits: Amazon said it added more value to its Prime membership, recently introducing free restaurant delivery in many areas and expanding Amazon's Pharmacy RXPass to Medicare members, which "gives subscribers all-you-can-consume access to the most common generic medications for just $5 a month," Jassy said. He also said there is a grocery subscription to help save on grocery purchases at its U.S. and United Kingdom Fresh stores.
Amazon's Pharmacy business continues to launch same-day delivery of medications to cities, Jassy said. It is currently in eight cities, including Los Angeles and New York "with plans to expand to more than a dozen cities by the end of the year," he said.
- More use of AI: Jassy said the company is "very bullish on the medium-to-long-term impact of AI in every business we know and can imagine." Companies have to "build muscle" around the best way to solve customer problems, he said, "but we see so much potential to change customer experiences."
Examples he used include AI features that allow customers to simulate trying on apparel items or using AI in fulfillment centers across North America to combine generative AI and computer vision "to uncover defects before products reach customers."
Amazon stores:Amazon's Just Walk Out tech has come under much scrutiny. And it may be everywhere soon.
How did Amazon do in the second quarter?
Amazon.com reported slowing online sales growth in the second quarter, sending shares down nearly 8% in an after-hours stock drop, Reuters reported.
The drop came despite a second-quarter profit and cloud computing sales that beat analyst estimates. Amazon shares had gained over 20% this year through the session close on Thursday, but investors were disappointed that the company forecast current-quarter sales below Wall Street estimates.
Amazon’s online stores sales rose 5% in the second quarter to $55.4 billion, compared with growth of 7% in the first quarter.
Amazon Web Services reported a 19% increase in revenue to $26.3 billion for the second quarter, surpassing market estimates of $25.95 billion.
The company expects revenue of $154.0 billion to $158.5 billion for the third quarter, compared with analysts' average estimate of $158.24 billion, according to LSEG data.
Amazon also missed estimates for advertising sales, a closely watched metric, as it ramps up competition with rivals Meta Platforms and Google. Sales of $12.8 billion in the quarter compare with the average estimate of $13 billion, according to LSEG data. The company earlier this year began placing ads in its Prime Video offering for the first time.
Still, Olsavsky said he was pleased with the advertising results. Those sales grew 20% in the quarter.
Greg Bensinger and Deborah Mary Sophia of Reuters contributed to this report.
Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.
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