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Amazon (AMZN) Boosts UK Delivery Services With Latest Move

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Amazon AMZN is leaving no stone unturned to bolster its position in the retail sector of the U.K. on the back of its strengthening delivery network.

This is evident from its latest delivery initiative via bikes and feet in London, which marks its first such move in the U.K.

Notably, the e-commerce giant has launched its first-ever fleet of electric cargo bikes and a team of on-foot delivery staff in the country. The intention behind this is to reduce traffic congestion on the roads of London by replacing several delivery van trips with e-bikes and walking delivery agents.

Starting with central London, delivery drivers will ride e-bikes and walk to the delivery spot of customers.

We believe that the introduction of e-bikes would make deliveries faster, as they will be able to move swiftly on the congested roads of London.

Amazon.com, Inc. Price and Consensus

 

Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Benefits of the Move

The latest move expands the company’s e-commerce prospects in the U.K. as it will aid it in delivering an enhanced shopping experience to customers, which, in turn, will likely boost the customer shopping rate on its online retail platform.

The launch of e-cargo bikes bodes well for the company’s last-mile delivery strategy.

The move will drive Amazon’s online sales in the country, which would get reflected in its overall top-line growth in the near term.

With such a strong rapid delivery initiative, along with a robust third-party seller network and ever-expanding availability of several products on its platform, Amazon remains well-poised to capitalize on the growth prospects in the e-commerce market of the U.K.

Per a report from Statista, revenues in this particular market are expected to hit $199.9 billion in 2022. Further, the figure is likely to see a CAGR of 12.6% between 2022 and 2025, and reach $285.6 billion by 2025.

Apart from retail benefits, the initiative of e-bikes and on-foot delivery teams, which would make zero-emission customer deliveries, is in sync with Amazon’s aggressive efforts toward reducing its carbon footprints globally.

Notably, the company aims to reach net-zero carbon emissions by 2040. It has been growing its investments in renewable energy projects for the past few years, which have accelerated the pace of its journey toward powering its infrastructure with 100% renewable energy. The goal was initially targeted to be met by 2030, which is now expected to be achieved by 2025.

Growing Endeavors in the UK

Apart from the latest move, the company’s opening of the Amazon Fresh store, with the ‘just walk out’ technology, in London remains noteworthy. The store stocks several grocery products from various brands. The company provides a cashier-less shopping experience to its customers via this store.

The introduction of Amazon Fresh Marketplace in the country and growing momentum across it remain major positives. The company provides Instacart-like service to customers with the help of the underlined amenity. Prime members are eligible to order groceries from two major supermarket brands in the country using the Amazon app and avail of the same-day delivery service.

The company’s partnership with the British clothing store Next plc to offer parcel collection options to its U.K. customers remains another positive.

We note that Amazon has Internet-equipped counters at the Next stores from where customers can collect their packaged parcels. To facilitate this, the company delivers several orders placed by U.K. customers to its Next stores.

We believe, all these endeavors will continue aiding Amazon in rapidly penetrating the booming retail market of the U.K. Moreover, its deepening focus on business expansion in the underlined country, which is considered to be one of its major markets, is expected to instill investors’ optimism in the stock in the near term.

Notably, Amazon has lost 34.3% on a year-to-date basis.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the retail-wholesale sector are The Kroger KR, Solo Brands DTC and AutoNation AN. While Kroger and Solo Brands currently sport a Zacks Rank #1 (Strong Buy), AutoNation carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kroger has gained 6.3% on a year-to-date basis. The long-term earnings growth rate for the KR stock is currently projected at 11.27%.

Solo Brands has lost 73.3% on a year-to-date basis. The long-term earnings growth rate for the DTC stock is currently projected at 16.74%.

AutoNation has lost 1.7% on a year-to-date basis. The long-term earnings growth rate for AN stock is currently projected at 24.74%.


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