Consumer Behavior

What Amazon's Q2 earnings reveal about consumer needs, expectations

While Amazon’s earnings reveal Amazon Web Services is driving big growth the data also reveals competitors have an opportunity to beat the omnichannel retailer.

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August 4, 2026 by Judy Mottl — Editor: RetailCustomerExperience.com & DigitalSignageToday.com, Connect Media

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Amazon beat analysts' Q2 expectations in a romp, reporting $200.6 billion in revenue — way ahead of the street's projected $197.01 billion. The revenue spike reflects a 20% growth year over year, according to a Seeking Alpha earnings call transcript.

Amazon's Amazon Web Services played a major role in driving the strong quarter and Amazon's AI and custom chip division each surpassed a $45 billion annualized revenue run rate, according to a Yahoo Finance report.

The market responded quickly to the robust earnings report with a 13% to 15% stock spike. Shares are up 17% compared to a year ago.

"This [Q2] was really a home run for Amazon," Arun Sundaram, senior vice president at CFRA Research, told Yahoo.

What Amazon shoppers want

Amazon's Q2 performance reflects changing consumer behavior as the retail industry, now focused on back-to-school sales, gears up for the retail's biggest shopping time — the holiday season.

Demand for everyday essentials is growing as consumers are increasingly looking for convenience and reliability when purchasing, according to Route CEO Eric Kobe.

While smaller retailers and brands may never beat Amazon at its own game — given its exceptional product range and delivery options — they can compete when it comes to crafting a great experience once a purchase is made.

"For years, retailers have treated faster shipping as the way to compete with Amazon. That's becoming a harder strategy to justify as fulfillment costs rise and logistics networks become more fragmented," Kobe said in an email interview. "Amazon has the scale and logistics infrastructure to absorb rising fulfillment and delivery costs, but most retailers don't have that luxury. Brands don't need to match the delivery speed of industry giants; they need to focus on giving customers a reason to come back after the package ships."

Providing a seamless post-purchase experience — whether it's providing clear return policies, easy exchange workflows or branded tracking —is one of the few areas where competitors can differentiate.

"And it's one of the rare ways brands can protect margins rather than erode them," said Kobe.

Amazon striving to keep competitors at bay

Amazon's Q2 earnings report revealed Amazon is intent on keeping competitors at bay.

The omnichannel retailer added millions of new products, including over 700,000 from known brands, according to Amazon CEO and President Andrew Jassy.

"We also expanded ultra-low price selection on Amazon Haul in the U.S. by nearly 20x since launch, and now have over six million items priced under $10. We continue offering everyday low prices that meet or beat our competitors as well as deep discounts and savings during sales events," Jassy said during the earnings call.

Jassy said he was pleased with customer response to Amazon's Prime Day sales event in June, which one analyst reported may have taken place too early for strong back-to-school consumer shopping, stating Amazon deals had more than 80% at their lowest price of the year and also featured hundreds of thousands discounted by 40% or more.

"We're the second largest grocer in the U.S. and our grocery business continues growing quickly across perishables and nonperishables," said Jassy, adding that fresh groceries make up six of the top 20 best sellers in Amazon.com.

In regard to Amazon's pharmacy service Amazon has saved consumers nearly $250 million so far this year in out-of-pocket costs.

"We continue speeding up overall delivery and once again achieved record delivery speeds for customers in the first half of the year," said Jassy.

Amazon delivered over 40% more items same-day or overnight in the first six months of the year than the same period last year.

Jassy said Amazon's ultrafast service Amazon Now, offers delivery in 30 minutes or less on thousands of everyday essentials, is now available in an additional 80 new cities and towns across the U.S. and several major cities in Egypt in Q2.

Amazon's investment in AI consumer facing tools is driving growth as well, said Jassy.

"In the U.S., customers who use Alexa for Shopping spend an average of over 40% more per order than those who don't. And customers who've tried Alexa+ are signing up for Prime at nearly 25% higher rates," said Jassy.

The tariff situation

During the second quarter Amazon received tariff-related refunds of nearly $600 million, according to Brian Olsavsky, Amazon senior VP and CFO.

The figure represents a "significant majority of refunds" Amazon expects to receive, according to the earnings call.

"We've identified a limited set of circumstances where we can trace that we've passed specific import charges onto customers, and when we receive those refunds, we will proactively contact affected customers and automatically issue refunds to them," Olsavsky said during the call, according to a CNBC report. "Otherwise, like other large retailers, we'll utilize refunds to continue to invest in low prices for customers."

Olsavsky said Q3 net sales are expected to be between $197 billion and $202 billion.

About Judy Mottl

Judy Mottl is the editor of RetailCustomerExperience.com and DigitalSignageToday.com at Connect Media. She is an award-winning editor, reporter and blogger who has worked for top media for nearly four decades, including AOL, InformationWeek and Internet News, as well as for leading technology providers including HP. She’s written everything from breaking news to in-depth industry trends and reported on technology long before the internet arrived, including the debut of the first smartphone. When she's not sharing insights on digital signage deployments and trends in retail customer experience she's on the beach or watching the latest live murder trial.

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