Amazon’s Domination of Retail

Amazon has gone a long way since its launch in 1995. With AmazonFresh, their food delivery service, AmazonDash, their commodity items replenishment service and Echo, the voice-recognition speaker that helps answer all your questions, Amazon has pushed the boundaries of retail. But lately, it’s been outgrowing retail and diversifying its offerings. Here’s a peak at how Amazon is redefining the landscape.

Amazon is the market’s biggest seller of apparel, after Walmart. But instead of resting on its laurels, it has decided to redefine what it means to be an eCommerce firm and redirected a portion of its profit towards finding the next rising stars. In order to do so, it has invested in several rising trends. As an early market entrant, it is establishing itself as a leader, and perhaps threat, to the retail industry.

Here are some of the Retail Trends Amazon has spotted and pursued.

Amazon pursues Streaming

Amazon has joined the Streaming Bandwagon, along with Apple, Netflix, Roku, Hulu but also with Spotify and Apple Music on the music front. Shifting away from a traditional entertainment delivery model, streaming introduced the same immediate gratification principles of online buying, applied to online content viewing. Netflix is known for having differentiated itself by moving from content distributor to content generator, with original series such as House of Cards and Orange is the New Black. The less well-known fact is that Amazon entered the market of original series around the same time as Netflix, in 2013. While expensive to produce, original series act as a lock-down of the customer, adding a “cost” for users to switch to competitors. With this strategy, Amazon may have an added competitive advantage: data intelligence. With its wide offering, Amazon could cross the information with other consumer habits in retail, reading, music and movies to uncover general trends and improve personalization.

Amazon experiments with IoT

Back in 2014, I had covered the emergence of IoT through this article and this one, and while it was not yet a ripe market for investment at the time, Amazon has seized the right timing with exactitude — marking it as a rival to the IoT’s biggest names such as Apple and Google. Its experiments span wider than the search engines, however; not only does Amazon have Alexa to jot down your grocery list (and purchase it from Amazon), but it also integrates the complete chain by delivering it to your door with AmazonFresh. Similarly, AmazonDash allows you to replenish your low-stock items from the click of a button. Amazon is also bringing IoT in the physical retail stores with services such as Amazon Go!, a new way to accelerate payment in stores.

Amazon invests in Consumer Data

It is no secret that consumer data is the new playground when it comes to online business. After the giant Google seized the advertising market, other players have followed suite. Think of Facebook’s and YouTube’s (in reality an extension of Google) Ad program. Amazon Marketing Services is now the new kid on the block. Although it has been introduced about a year ago, it is now catching up to Google, with a service that can rival in features. This is a service that has not yet matured and which we should follow closely in the upcoming months, to see the points of differentiation and added-value that will emerge.

Amazon becomes an End-to-End, Cross-Platform Player

Three years ago, I also wrote this article on the emerging phenomenon of Showrooming. While everyone has been watching the brick-and-mortar retailers tuning into the digital transformation, Amazon surprised everyone by extending its online services to brick-and-mortal channels, with pop-up stores. These pop-up stores allow users to walk into an Amazon store, test devices and buy them. The products sold are used to generate even more trafic to the site, as Echo, Kindle and FireTV are well linked to the Amazon eCommerce site. With Amazon Go, Amazon is also attacking the grocery market.

Amazon has also gone against the grain with its decision to own the End-to-End shopping experience. In this article, I spoke about the new platform economy which is now trending, focusing on building Ecosystems. Although it started as a big player in the platform model, Amazon took things one step further by acquiring a fleet of planes, which reduces its reliance on FedEx and other courrier services. While the CEO of FedEx shrugged off the competition, this is, in reality, nothing to shrug at.

From influencing you pre-purchase to capturing your order and delivering it to your door, Amazon has in essence covered every inch of the customer journey.

Originally published at https://www.linkedin.com on April 17, 2017.

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Mixed Methods Design Researcher and Podcaster at “Different by Design” (launching in April!) and “Healthcare Focus”.

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Corina Paraschiv

Corina Paraschiv

Mixed Methods Design Researcher and Podcaster at “Different by Design” (launching in April!) and “Healthcare Focus”.

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