The ecommerce giant recently announced the expansion of one-day delivery for Prime customers to include millions of SKUs available through Amazon.com. A side effect of this decision has been a huge increase in the value of inventory held by the company, as it increases purchases and holds more stock in fulfilment centres to enable the new delivery promise.
The value of Amazon's inventory has increased 25%, to almost $18.6 billion per its quarterly report.
While Amazon has had to massively increase inventory in order to offer this level of delivery, competitors like Target and Walmart are better positioned to offer fast delivery without adding billions in new inventory thanks to their existing inventory in stores.
This highlights an advantage of omnichannel retail and the opportunity for US retailers to maximise the value of their store footprints in terms of online order fulfilment. Unsurprisingly, Amazon is also trying to move into stores as we've seen extensively in the US. Now though, they're hiring for stores in the UK...