This fall, the company’s Just Walk Out technology will be in the most new stores to open at NFL stadiums in a single season, Amazon announced Tuesday (Sept. 3).

In addition, Just Walk Out (JWO) is being added to more college campuses, with more than 30 university stores around the world using the technology, which allows consumers to scan a credit card before entering the store, with Amazon charging them for the items they pick out.

“Last season, NFL game attendance reached a peak of nearly 19 million fans showing up to support their teams, and they don’t want to miss a minute of the action,” Amazon said in a news release. “Long lines for concessions have been a growing complaint of fans who want a speedier and more convenient shopping experience.”

To combat this problem, the company is opening six new JWO locations at Seattle’s Lumen Field: five traditional stores and one enabled with radio-frequency identification (RFID) which allows the “checkout-free experience to expand to clothing, hats, fan gear, and more.”

These new stores bring Lumen’s JWO total to 15, the most of any venue around the world, Amazon added.

As noted here last month, Amazon has recently introduced a new multimodal artificial intelligence (AI) system for JWO, designed to enhance the accuracy and scalability of checkout-free retail environments. Compared to its predecessors, which analyzed shopper actions sequentially, this new AI simultaneously processes data from a variety of sources throughout the store.

“We accomplish this by analyzing data from cameras and sensors throughout the store simultaneously, instead of looking at which items shoppers pick up and put back in a linear sequence,” Amazon said.

The system’s ability to learn and adapt is “particularly noteworthy,” PYMNTS wrote. Trained using a three-dimensional map of the store and a catalog of merchandise images it can understand the placement of fixtures and recognize products.

“This continuous learning capability suggests a future where retail environments become responsive to shopper behaviors,” PYMNTS wrote.

“Multimodal AI is a significant game changer,” Shawn DuBravac, CEO of Avrio Institute, a think tank studying emerging technologies, told PYMNTS. “It will drive advancements across numerous industries, leading to smarter, more adaptive systems that can understand and respond to the world in a more humanlike manner.”

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The glitch in the eCommerce site happened Friday (Aug. 30), preventing customers from completing their purchases, CNBC reported, citing reports from customers on social media.

The news network said Amazon’s Web Services division did not report any technical problems when the checkout feature was down. 

Amazon had been promoting discounts for a Labor Day weekend sale, though some members of the X social network said they weren’t able to buy products at a discount due to the glitch. Amazon’s Help account on X replied by suggesting users get in touch with the company.

PYMNTS has contacted Amazon for comment but has not yet gotten a reply.

According to the report, Amazon has cautioned investors that technical troubles could drive down sales and harm perceptions of the company’s products and services. The company’s second quarter sales came to nearly $148 billion, a figure the report described as “healthy.”

In other Amazon news, PYMNTS wrote last week about reports that the company was planning an artificial intelligence (AI) overhaul for its Alexa voice assistant. The company plans to transform the free offering into a paid subscription service, according to a Washington Post report, citing internal company documents.

“The bigger picture here is the evolution of Amazon’s strategy for monetizing its AI services,” Ghazenfer Mansoor, founder and CEO of the AI company Technology Rivers, told PYMNTS. “For a long time, the company’s approach was simple: offer cheap or free services to attract people, then rely on selling products and advertising. But as the cost of developing and maintaining advanced AI capabilities rises, it makes sense for companies to start exploring other revenue streams.”

Meanwhile, PYMNTS also wrote last week about efforts by Amazon and rival Walmart to seize on consumers’ demand for digital restaurant ordering to fuel engagement with their paid memberships, providing dining benefits to make subscriptions more attractive.

For example, Walmart recently announced a partnership with Burger King, its first Walmart+ dining collaboration, while Amazon earlier this year expanded its arrangement with Grubhub to provide Prime members with free Grubhub+ subscriptions on an ongoing basis.

“We’re just trying to make it really simple for our members to not only find out about what value they have in their Prime membership, but also to actually benefit from it on monthly, weekly, daily basis — however it fits into their busy lives,” Jamil Ghani, vice president of Amazon Prime, said in an interview with PYMNTS at the time.

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“We’re constantly refreshing our catalog and making sure that we keep delivering new titles that keep kids really excited,” Jon Lyon, leader of the content and business development teams at Amazon Kids+, said in the release.

To keep this digital environment safe for kids, Amazon Kids+ is ad-free, offers parental controls to prevent in-app purchases and provides a safe web browser that ensures kids don’t stumble across inappropriate content or social media, according to the release.

The digital subscription service is available in five countries — the United States, Canada, the United Kingdom, Germany and Japan — and can be used across compatible Echo, Fire tablet, Fire TV, Kindle, Android and iOS devices, the release said.

It offers age-appropriate content for preschool to preteen kids, per the release.

“We want to be a positive contribution to a child in their development, in whatever way they want and need us to be,” Monte Babington, leader of content and child engagement for Amazon Kids, said in the release. “If you’re interested in … fill in the blank … we probably have a book, video or app related to it.”

Amazon also offers a Parent Dashboard that lets parents or guardians create profiles for up to four children, configure settings, set screen-time limits, monitor their child’s activities, and find age-appropriate content.

In addition, Amazon’s Family Trust team provides parents and guardians with information about Amazon digital devices and content, and how to safely navigate the digital world, through Amazon’s Family Digital Well-Being Hub.

It’s important that retailers tailor their marketing strategies to the specific needs of different household types, PYMNTS reported in July.

For example, merchants are adapting to the fact that married parents are emerging as the leading demographic for apparel retailers, demonstrating a preference for clothing and accessories purchases compared to other household types, according to the PYMNTS Intelligence report, “The Last Transaction: Family Spending Habits Reveal Merchant Opportunities in Retail and Travel.”

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The event will give Prime members early access to holiday deals, the eCommerce giant announced Thursday (Aug. 22), with the launch planned for 19 countries — Australia, Austria, Belgium, Brazil, Canada, France, Germany, Italy, Japan, Luxembourg, Netherlands, Poland, Portugal, Singapore, Spain, Sweden, United Kingdom, Turkey and the United States.

In its announcement, Amazon touted some of the benefits of Prime membership, such as faster and free delivery.

“We hit our fastest Prime delivery speeds ever so far this year, with more than 5 billion items arriving on the same or next day globally — a new record,” the company said.

Recent research by PYMNTS Intelligence examined data from this summer’s Amazon Prime Day and Walmart+ Week sales events to glean insights for executives, merchants and consumers alike.

“Amazon Prime Day and Walmart+ Week are seen by most consumers as opportunities to snag good deals on frequently purchased items rather than motivators to join these paid memberships,” PYMNTS wrote earlier this week.

The data shows that about three-quarters of consumers took part in these events primarily to get deals on products they regularly purchase. But these sales were not the primary reason consumers subscribe to Amazon Prime or Walmart+.

According to the research, 80% of Amazon Prime subscribers point to free shipping as their main reason for joining, with 57% specifically citing it as the most important factor. Similarly, 61% of Walmart+ members value free shipping, while 49% appreciate grocery delivery. Just 30% of Walmart+ subscribers and 23% of Amazon Prime members signed up for the sales events themselves.

“This suggests that while these events are attractive perks, they are not strong drivers of membership,” PYMNTS wrote. “For Amazon Prime and Walmart+, there is an opportunity to enhance the impact of these sales to convert more non-subscribers into members.”

Also Thursday, PYMNTS wrote about Amazon’s expansion of its grocery delivery subscription service, which now offers an annual plan for Prime members and an extension for its discounted subscription to all Prime Access members.

These new offerings expand upon the success the grocery subscription has seen since its debut in April, the company said.

“Since launch, we continue to see strong sign-ups for the grocery subscription and a positive customer response,” the company said in a news release. “Customers see immediate value in the subscription as it saves them money on grocery delivery fees and makes their grocery shopping experience more convenient.”

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These new offerings build upon the success the grocery subscription has seen since its launch in April, Amazon said in a Wednesday (Aug. 21) press release.

“Since launch, we continue to see strong sign-ups for the grocery subscription and a positive customer response,” the company said in the release. “Customers see immediate value in the subscription as it saves them money on grocery delivery fees and makes their grocery shopping experience more convenient.”

The subscription includes unlimited grocery delivery on orders over $35 from Amazon Fresh, Whole Foods Market, and local grocery and specialty retailers on Amazon.com, according to the release. It is available in 3,500 cities and towns in the United States.

When it was launched, the subscription was available at $9.99 per month for Prime members and $4.99 per month for customers with a registered Electronic Benefits Transfer (EBT card), the release said.

Now, with the addition of the annual plan, Prime members can also select that plan for $99.99 per year, per the release.

“This new annual plan allows Prime members to choose the grocery delivery subscription benefit that best fits their needs and budget,” the release said. “The monthly option offers Prime members flexibility and lower upfront costs, while the annual plan offers the best savings.”

The other new offering announced Wednesday makes the discounted, $4.99-per-month grocery delivery subscription available to all Prime Access members, regardless of their qualifying form of government assistance, according to the release.

“We have many different customers with many different needs, and we want to save all of them time and money so they can focus on what matters most,” Amazon said in the release.

Amazon launched its grocery delivery subscription service in April after testing it in Denver, Sacramento and Columbus, Ohio, in 2023.

Tony Hoggett, senior vice president of worldwide grocery stores at Amazon, said in an April press release that the company aims to build “a best-in-class grocery shopping experience — whether shopping in-store or online.”

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During the company’s second-quarter earnings call on Aug. 1, Jassy noted Amazon Pharmacy’s progress since it launched in November 2020.

“On the pharmacy side, you’re seeing that business continue to grow and to get more resonance with customers,” Jassy explained. “It was always a relatively natural extension for us to build a pharmacy offering from our retail business. But I think a lot of what you see in the business has grown really quickly, a lot of what you’ve seen is that the work that the team has done on the customer experience over the last 18 months has really paid off.”

Jassy’s latter point is crucial for Amazon.

“Customers love the customer experience of Amazon Pharmacy,” he explained. “When you think about the experience and the speed and ease with which you can order versus walking into a pharmacy in a physical store, if you walk into pharmacies in cities today, it’s a pretty tough experience with how much is locked behind cabinets, where you have to press a button to get somebody to come out and open the cabinets for you. So, the combination of what’s happening in the physical world and how much improved we’ve made our pharmacy experience is driving a lot of customer resonance and buying behavior. Also, you see us continuing to expand there.”

Amazon Pharmacy offers a streamlined way to manage prescriptions via Amazon.com and its app. Users can search for medications, create profiles, and transfer prescriptions while viewing details such as cash prices, prescription requirements, and eligibility for free Prime shipping. The service provides various payment options, including insurance and discounts for Prime members. For eligible generic medications, Amazon Pharmacy’s  RxPass program now offers Prime members on Medicare unlimited consumption of 60 broadly used prescription medications for just $5 a month.

Launched in early 2023, RxPass expanded with plans to increase same-day delivery of prescriptions to additional U.S. cities beyond current offerings in major metro areas like Los Angeles and New York.

“We continue to launch same-day delivery of medications to cities,” Jassy explained. “We have them in eight cities, including Los Angeles and New York today, with plans to expand to more than a dozen cities by the end of the year. So, we’re seeing a lot of growth there and we’re very optimistic about it.”

In an interview with PYMNTS, Greg Zakowicz, senior eCommerce expert at Omnisend, said he’s not surprised to see Amazon make progress with prescription drug services.

“While many people may point to the number of Prime members as the catalyst for their success, which certainly helps, I think they are reaping the rewards by improving upon what insurers have been doing for years,” Zakowicz explained. “Insurers have been conditioning consumers to adopt mail-order prescriptions by offering discounts, but even with the slight discounts, prices still remain high. Amazon swooped in and tackled the more important aspect of the two, price.”

Zakowicz noted the inclusion of Medicare beneficiaries as a “major win” for the company, adding, “Baby boomers, still a sizeable cohort, are often the ones bearing the brunt of high-cost prescriptions. If Amazon continues to expand its drug offerings, combined with its current subscriber base, it could become the top one or two pharmacies in the U.S.”     

Meanwhile, Neil Saunders, managing director, retail, at research firm GlobalData, told PYMNTS “online remains a very small part of the pharmacy market and, while it is growing, Amazon has not disrupted it in the way it has disrupted other parts of retail. That said, traditional drugstore chains are doing themselves no favor by worsening their in-store experiences across both general merchandise and within pharmacy. This is playing right into Amazon’s hands by driving more people online.”

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.

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Across all operating segments the retail, cloud, AI and multimedia company reported net sales climbing 10% year over year to $148 billion, bolstered by a 19% surge in AWS sales to $26.3 billion. Operating income nearly doubled to $14.7 billion, up from $7.7 billion in the same period last year. Net income also saw significant growth, reaching $13.5 billion, or $1.26 per diluted share, compared to $6.7 billion, or $0.65 per diluted share, in the previous year. Notably, the company’s operating cash flow surged 75% to $108 billion over the trailing 12 months, while free cash flow increased to $53 billion. The North America and international segments posted sales growth of 9% and 7%, respectively.

“While consumers are being careful on price, our North American unit growth is meaningfully outpacing our sales growth as our continued work on selection, low prices and delivery has resonated so far this year,” CEO Andy Jassy told the company’s Q2 earnings call.

“Our speed of delivery for Prime customers has been faster than ever before, with more than 5 billion units arriving the same day or next day. As more customers experience our fast delivery, they look to Amazon for more of their shopping needs and the continued acceleration of our everyday essentials business.”

What Wall Street didn’t like — and punished the stock for in after-hours trading — was the relatively tepid outlook on Q3 prospects. It also didn’t like results and outlook on two newer initiatives, artificial intelligence (AI) and advertising.

The companies advertising revenue came in below Wall Street estimates and below the result posted by other Big Tech companies so far, Alphabet and Meta. On the AI front, Jassy went to great lengths during the earnings call to connect model and chip development to the fortunes of AWS. 

Jassy emphasized a strategy of offering diverse tools and options rather than a one-size-fits-all approach. Jassy noted the demand for Amazon’s custom silicon chips, Tranium and Inferentia, which offer compelling price-performance advantages. He also pointed to Amazon Sagemaker’s new HyperPods feature, which enhances networking performance for large models, and Amazon Bedrock, which boasts the largest selection of generative AI models.

Jassy also emphasized the impact of AI in various areas, from enhancing customer shopping decisions with AI-powered tools to improving operational efficiency in fulfillment centers. He underscored Amazon’s commitment to ongoing investment in AI, driven by its potential to transform customer experiences and business operations.

“We remain very bullish on the medium- to long-term impact of AI in every business we know and can imagine,” he said. “The progress may not be one straight line for companies. Generative AI, especially, is quite iterative, and companies have to build muscle around the best way to solve actual customer problems. But we see so much potential to change customer experiences.”

Amazon’s purchases of property and equipment, a measurement of its capital spending, was $17.62 billion in the second quarter. That is more than 50% higher than the year-earlier level and the highest quarterly spending since 2021.

Jassy and CFO Brian Olsavsky were coy about the prospects for Q3. Net sales are expected to be between $154 billion and $158.5 billion, or to grow between 8% and 11% compared with third quarter 2023. Operating income is expected to be between $11.5 billion and $15 billion, compared with $11.2 billion in third quarter 2023. However, some of those results will depend on final sales from the company’s July 16-17 Prime Day event and the advertising expenses to promote it.

The call was notable for its mention of Expanded Amazon Pharmacy’s RxPass program, which now offers Prime members on Medicare unlimited consumption of 60 broadly used prescription medications for $5 a month.

“When you think about the experience and the speed and ease with which you can order versus walking into a pharmacy in the physical store — if you walk into pharmacies in cities today, it’s a pretty tough experience with how much is blocked behind cabinets where you have to press a button to get somebody to come out and open the cabinets for you, and a lot of shoplifting going on in the stores,” Jassy said. “So, the combination of what’s happening in the physical world and how much improved we’ve made our pharmacy experience is driving a lot of customer resonance and buying behavior. I think also you see us continuing to expand there.”

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The eCommerce giant announced Tuesday (July 30) that it made more than 5 billion same-day or next-day deliveries so far this year, up more than 30% year over year and a company record.

Most of the 5 billion items were delivered “on behalf of independent sellers using Fulfillment by Amazon,” the company said in a news release. “More than 60% of the units sold in Amazon’s store come from independent sellers.”

Amazon says it reached this goal by expanding its same-day delivery service to more than 120 metro areas in the U.S., shortening the distance deliveries had to travel by regionalizing its fulfillment network.

The company announced last year that it was doubling its same-day delivery centers, along with plans to recruit smaller, local businesses to assist in its last-mile delivery efforts.

In addition, the company says it has also improved inventory placement and ensured that in-demand products are stocked locally and in the proper buildings for each region.

The 5 billion figure is up from the 2 billion-plus number the company reported for the first quarter of 2024 in April.

PYMNTS last week wrote about Amazon Prime as an example of “product market fit,” the concept of recognizing the importance of aligning products with market demands.

“Many loyalty initiatives flounder because they focus inwardly on the program mechanics rather than outwardly on understanding genuine customer needs,” that report said.

Prime, launched in 2005, was originally designed to ease customer frustration with shipping times, focusing at first on delivering the loyalty program perks that its top customers desired, gradually expanding its offerings as time went on.

“Amazon listened to its customers, understood their pain points, and continually invested to acquire and retain more members and transform them into brand advocates,” PYMNTS wrote.

“The emphasis here is on investing in the customer rather than the product. In today’s landscape, instant gratification holds heightened significance, particularly evident in subscription loyalty programs like Amazon Prime, where members receive instant benefits. Amazon Prime members spend nearly twice as much annually compared to non-Prime members.”

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The paid tier will offer a version of the voice assistant that has been dubbed “Remarkable Alexa,” is built on a new tech stack and offers greater capabilities, The Wall Street Journal (WSJ) reported Tuesday (July 23), citing unnamed sources.

Remarkable Alexa will incorporate more generative artificial intelligence (AI) than the current version of the voice assistant and will provide users with more seamless control of smart home devices by using their voice, according to the report.

“Alexa is about to get a lot smarter,” Jeff Bezos said in December 2023 during a podcast interview, hinting that a new version may be on the way, per the report.

The company has not yet determined a price for the new paid tier, the report said.

The development of Remarkable Alexa began when Amazon CEO Andy Jassy urged teams to find a way to monetize Alexa and Amazon’s Echo speakers, according to the report.

Currently, although hundreds of millions of people own Alexa-enabled devices, the Echo speakers are not delivering a payoff for the company because people are using them for free apps, the report said.

Jassy’s effort to monetize the devices and the voice assistant mark a change from Amazon founder’s Jeff Bezos’s strategy to develop devices based on “downstream impact,” or DSI, per the report.

That strategy allowed selling devices at cost or at a loss if they generated sales down the line — as when the sale of a Kindle eReader leads to the sale of eBooks to read on that device, according to the report.

The DSI strategy has not paid off in the case of Echo because customers have used it primarily for free services such as checking the weather rather than to place a meaningful amount of eCommerce orders, the report said.

An Amazon spokeswoman told the WSJ that the company’s devices business has established profitable businesses and is prepared to continue doing so, per the report.

“Hundreds of millions of Amazon devices are used by customers around the world, and to us, there is not greater measure of success,” the spokeswoman said in the report.

Amazon has been clear about its intentions to charge a subscription for a tiered Alexa service since September 2023, and improvements to voice technology driven by AI may force the issue, PYMNTS reported in April.

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In the wake of the outage, eCommerce retailers have themselves in an unfortunate position. The disruption impacted shipping giants UPS and FedEx, leading them to warn consumers about potential delays, which could impact merchants’ ability to meet their customers’ demand for fast and reliable delivery.

For Amazon’s part, Prime Day deliveries may also be delayed. For instance, a self-described participant in the company’s Seller Fulfilled Prime program, which enables businesses to sell via Prime from their own warehouses, recently took to the official seller discussion board noting that Next Day Delivery orders are facing delays.

“This is something that we cannot foresee and control. Unfortunately, there is no news from Amazon on what things to do with this situation,” the seller stated. “…I hope someone gives us some information about this. This will mess up our metrics and it’s causing us a lot of stress.”

Amazon posted a workaround on Friday (July 19). According to the post, the outage affected both Amazon Elastic Compute Cloud (EC2) instances and Amazon WorkSpaces personal virtual desktops that run on Windows and use the CrowdStrike software. It recommended users fix the issue by allowing the CrowdStrike Falcon Sensor agent to update correctly.

The post also noted that if a user’s device uses what’s called instance store volumes — a type of storage directly attached to the host computer — any data on those volumes will be lost if the device is stopped, put into hibernation or terminated. In such cases, the data is securely erased. For further details, it referred users to the information on Amazon EC2 instance store.

Slower than expected shipping can have a significant impact on shoppers’ satisfaction. The report “Tracking the Digital Payments Takeover: Catching the Coming eCommerce Wave,” a PYMNTS Intelligence and Amazon Web Services (AWS) collaboration, found that 27%  of consumers cited delivery delays as issues they experienced with online purchases.

This spells bad news for Amazon: the outage, which began late Thursday (July 18) came just one day after the close of Amazon’s Prime Day event July 16 and 17. As such, impact on shipping could affect customers’ satisfaction with the eCommerce giant at a time when considerably more shoppers will feel the impact than they would at other times of the year.

During the saving event, Amazon saw surging sales. In a typical day, the company averages about $1.6 billion in sales, per data from its Q1 2024 earnings report  — the most recent period on record — showing that the eCommerce giant brought in $143.3 billion in sales in the three-month span. In contrast, over the Prime Day two-day event, the retailer is estimated to have brought in $14.2 billion in sales — nearly five times the company’s average haul for a two-day period.

These shipping delays are far from the only way that the CrowdStrike outage could be affecting retail merchants. Reports have circulated of the event impacting retailers’ ability to do everything from accepting payments to analyzing sales data to even staying open.

The CrowdStrike outage comes at a particularly inopportune moment for Amazon, right on the heels of its highly anticipated Prime Day. As merchants and consumers alike navigate this turbulence, the incident underscores the fragility of modern digital infrastructures and the far-reaching consequences that technical failures can have on even the most resilient retail giants.

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