Top Retail News You Need to Know This Week

In the past few months, discussions about AI in retail have largely focused on its benefits, but recent events show the challenges of rapid adoption. This week’s retail news highlights the risks that can arise when oversight struggles to keep up.

• AI-assisted code changes trigger Amazon outages: Several disruptions at Amazon reveal the risks of deploying AI-assisted development tools at scale, including an incident that caused incorrect delivery estimates, about 120,000 lost orders, and 1.6 million website errors.
• Amazon’s AI push is reshaping work inside the company: Employees say growing use of internal AI tools is changing workflows, with engineers increasingly reviewing or fixing AI-generated output as the company invests heavily in automation.
• Retailers find that slower shipping can cut costs and reduce returns: As shipping costs rise, many retailers are testing “no-rush” delivery, with early results showing shoppers will wait longer for cheaper shipping while sellers reduce logistics costs and returns.

Explore this week’s retail news on AI deployment challenges at Amazon and why retailers are turning to no-rush delivery.

Amazon Outages Expose Growing Pains in AI-Driven Development

AI is becoming central to retail operations, promising improved efficiency. However, recent incidents at Amazon show what can happen when adoption outpaces oversight.

In early March, customers across Amazon marketplaces encountered incorrect delivery estimates when adding items to their carts. The issue triggered roughly 120,000 lost orders and 1.6 million website errors, according to documents reviewed by Business Insider. Just days later, another disruption caused a dramatic drop in orders across Amazon’s North American marketplaces, reportedly resulting in 6.3 million lost orders.

Amazon linked at least one of the incidents to its internal genAI assistant, Q, which engineers use to generate large volumes of code efficiently. While the company says only one of the recent incidents involved AI-related factors, the events prompted Dave Treadwell, Amazon’s SVP of Ecommerce Services, to examine what he described as a growing “trend of incidents” tied to “high blast radius” software changes. High blast radius refers to updates that propagate widely across systems when safeguards fail.

AI coding assistants may help boost productivity but they also create new challenges because traditional review processes were never designed to handle such a high volume of changes. Every AI-generated update still needs to be reviewed, tested, and validated before reaching production systems, otherwise, errors can slip through.

To reduce risk, Amazon introduced a 90-day safety reset for roughly 335 Tier-1 systems or mission-critical services that directly affect customer orders, pricing, and other core retail operations. The reset involves stricter code reviews, additional documentation, and two-person approvals before major changes go live.

AI’s Growing Role in Amazon’s Workplace

Yet while Amazon tightens safeguards around critical systems, the role of AI inside the company continues to expand.

Several current and former employees told The Guardian that teams are increasingly encouraged to use internal AI tools for tasks ranging from coding to operations. Engineers say their work often involves reviewing and correcting AI-generated code rather than writing it themselves, with one developer describing the process as “trying to AI my way out of a problem that AI caused.”

Others say the tools work only part of the time due to inaccuracies or hallucinations. One supply chain engineer said AI helps complete tasks successfully about one in three attempts, often requiring additional verification from colleagues. Some employees also report pressure to use AI even when it may not be the best fit for the task, causing teams to introduce AI-generated changes that require more debugging or add complexity to already intricate systems.

This reveals that automation can increase development speed and expand what teams can build. But when the volume of changes grows faster than the processes designed to review them, the risk of system-wide errors rises.

That balance matters even more given the scale of Amazon’s current AI ambitions. The company is investing heavily in AI infrastructure while simultaneously reducing parts of its corporate workforce as it pursues greater automation and efficiency.

The question isn’t whether AI will remain central to Amazon’s strategy, because it clearly will. The bigger question is how quickly it can build the operational guardrails needed to support that strategy at scale.

Retailers Are Bringing Back “No-Rush” Delivery, and Shoppers Are Okay With It

Slower delivery once seemed unthinkable in the era of instant gratification, but now, this option is becoming a practical strategy for managing rising logistics costs. And surprisingly, many shoppers are willing to wait.

No-Rush Delivery Was Always Part of the Strategy

The idea of slower shipping isn’t new. As early as 2020, retailers began testing “no-rush” delivery options that rewarded customers for choosing later delivery dates. The approach reportedly helped lower shipping costs, ease pressure on fulfillment networks, and reduce packaging waste.

Amazon, for example, has long offered small incentives (up to $3 cost savings during the pandemic, and this year, 7% discount) for customers who select no-rush delivery. But at the time, these options remained secondary to the industry’s broader move toward faster shipping.

Rising Costs Are Changing the Equation

Today, the economic reality of shipping is forcing retailers to rethink that model. According to Wall Street Journal (WSJ), FedEx and UPS have steadily raised shipping rates since 2020, increasing base prices between roughly 4.9% and 6.9% annually while adding new surcharges for fuel, residential delivery, and package dimensions.

At the same time, tariffs on imported goods, especially products sourced from China, are squeezing retailers’ margins. Rather than raise product prices, many brands are adjusting shipping policies instead.

For example, lunchbox brand Modern Picnic recently raised its free-shipping threshold from $150 to $300, and now charges $15 for smaller orders, while other retailers have eliminated free shipping or increased order minimums.

According to Narvar CEO Anisa Kumar, many brands prefer adjusting logistics costs because it is less visible to consumers than raising prices directly.

Customers Care More About Cost Than Speed

The surprising part is that shoppers are largely accepting the change. A 2024 McKinsey survey found shipping cost ranked as the top factor in online purchases, while delivery speed fell to fifth. More than 80% of 1,000+ respondents said they preferred free shipping that takes four to seven days over paying extra for faster delivery.

Slower Shipping Can Also Reduce Returns

Another benefit of slower shipping is fewer returns. Per WSJ, retailers say customers who choose longer delivery windows tend to make more intentional purchases. Fur-coat retailer Casiani, for example, saw returns drop by 20–30% after extending delivery times. That finding could be significant for sellers, since returns can cost up to 65% of a product’s original value.

A New Balance Between Speed and Cost

None of this means fast delivery is disappearing. Amazon still delivered eight billion items to US Prime members the same or next day last year, and competitors continue expanding same-day fulfillment capabilities. But retailers are increasingly recognizing that not every order needs to arrive tomorrow.

Offering customers a wider range of delivery options, including slower and lower-cost choices, can help businesses manage rising logistics expenses without directly increasing product prices. 

Other Amazon Sellers News This Week

1. Remove Meltable FBA Inventory by April 20

Amazon is reminding sellers to remove meltable inventory from fulfillment centers before April 20, 2026, when the annual summer storage restriction begins. Any meltables left in FBA after the deadline may be marked unfulfillable and disposed of for a fee starting May 1. Review Amazon’s meltable ASIN list and submit removal orders soon to avoid unexpected losses or disposal fees.

2. Connect Your Catalogs to Shop Direct

Amazon is making it easier for merchants to connect their catalogs to its AI-powered Shop Direct experience, which helps customers discover products from stores across the web. Sellers can now integrate catalogs through feed partners such as Feedonomics, Salsify, and CEDCommerce. Once connected, shoppers can either buy directly from the seller’s D2C site or use Amazon’s Buy for Me option to complete the purchase through Amazon.

3. Walmart Opens 2026 Product Pitch Tour

Walmart’s 2026 Road to Open Call tour gives entrepreneurs a chance to pitch products directly to company buyers. The Indianapolis stop on June 11 will spotlight shelf-ready products made, grown, or assembled in the US, with a chance to advance to the retailer’s annual Open Call event in Bentonville. Applications close May 22.