RealTime IT News

Amazon: Bring On the Holidays

Online retail giant Amazon says it is geared up for the holidays and the mantra once again will be "fulfill, fulfill, fulfill."

Jeff Wilke, Amazon's senior vice president of worldwide operations and customer service, said at a conference with financial analysts that productivity increases on the part of its labor force will mean that the same number of employees will be able to ship 10 to 20 percent more orders this year.

Wilke is looking at his fourth holiday shipping season with the retailer.

The teleconference on Amazon's operational and distribution readiness was sponsored by Deutsche Bank Securities and hosted by that company's analyst, Jeetil Patel.

Amazon has more than 3 million square feet of warehouse space in the U.S. that it built, mostly in 1999, and during the holiday season it takes short-term leases for another million square feet. Shipping centers are located in Nevada, Oklahoma, Delaware and Kentucky, among other places.

"We're OK relative to space capacity," Wilke said, adding that "in the U.S. we can ship over a million units a day at peak."

Inventory from Amazon partners Target and Toys 'R' Us is mixed in across the U.S. to optimize transportation costs, Wilke said. Amazon uses a mathematical model that helps to decide where to place inventory by region.

As far as the work force is concerned, "we are, at peak, essentially double the number of people employed" the rest of the year, Wilke said. "The goal is to staff full time for the non-holiday season, then add people on a temporary basis.

He also said the company has seen double digit productivity increases in shipping for the past three years.

Asked about disruption resulting from the West Coast port strike, Wilke said "We're actually in pretty good shape. In terms of our hardlines, we had begun some sourcing before problems developed."

Seattle-based Amazon last month reported record third-quarter revenues of $851 million, up 33 percent from the $639 million it reported in the same period a year earlier.

Meanwhile, there was a host of other news regarding Amazon, including the official announcement of its new multi-retailer clothing store, which launched in beta last week and was Amazon's worst-kept secret. The new store features 400 brands, all of which had been disclosed previously.

Wilke said most of the shipping from the apparel store will be done by Amazon's merchant partners themselves.

Amazon also said it is teaming with Seattle-based Webcasting and digital media services company Loudeye to provide hosted music samples across the retail site and in its music store using the Loudeye Samples Service.

It's a big win for Loudeye, which is replacing Muze. Amazon conducted tests of potential music sample partners, a spokesman for Loudeye said.

Loudeye says it has relationships with all five major record labels and hundreds of independent labels. Amazon visitors will have access to new releases as well as a catalog of more than three million music samples from more than 250,000 CDs. Financial arrangements were not disclosed.

Other Amazon developments this week:

  • Amazon.co.jp, the company's operation in Japan, launched a new marketplace enabling third parties to buy and sell new, used and collectible items on the same page as Amazon's product information
  • Amazon.com UK is making its first-ever free delivery offer, on all orders over $39. The offer was timed to coincide with the launch of Amazon.co.uk's gift store and a range of Christmas pricing offers and will run until Dec. 12
  • Amazon also boosted the number of magazines, newspapers and newsletters available on its Web site to 50,000, promising that "tens of thousands" would be added on top of that. Amazon is encouraging shoppers to send gift subscriptions
  • Thomas O. Ryder, 58, chairman and CEO of the Reader's Digest Association, was named to the Amazon board, replacing Scott Cook, chairman of the executive committee of Intuit Inc., who resigned after six years.

Separately, Amazon reported Udi Manber, former chief scientist of Yahoo!, will become vice president and chief algorithms officer for the company.