Amazon 2019: Growth As A Service, The Cross Category Killer Release date: August 20th, 2019 (105 pages) PDF/Powerpoint format. Price: GBP985.00 PDF brochure Buy

Abstract

To the occasional visitor to the USA, it might seem as if Amazon has taken over America. The retailer is siphoning off spend on Whole Foods, as well as generating income from AmazonGo/ book stores/4star. An Alexa powered Echo can be found in the hotel/hire car, as can PrimeVideo, prime labelled vans are everywhere and so on. And all of this a visitor would notice without having had any interaction with the main legacy website. To put it in other words: between Amazon retail (1P and 3P), devices and Prime Video, hardly a day goes by when fewer than 100 million people touch Amazon.

•  Its recent standout innovation AmazonGo is truly revolutionary, while other retailers have introduced their own checkout-free scan-and-go services, Amazon Go’s “Just Walk Out Shopping” technology has taken that convenience experience up several notches.

•  For the Go stores, Amazon can claim that it has solved stealing, maybe someone
could hack the bar code on entry – but for the moment shoplifting has been abolished. The concept uses Amazon’s amazing computer abilities (using AmazonPay and AWS of course, also the computer vision also used in its facial recognition software) to scale, just as the retailer created synergies between prime, marketplace and FBA.

•  In future, Amazon could grow the concept and license the cashierless technology to other convenience retailers. (We are really curious what Amazon’s preconditions would be for this – such as prime membership for a rival retailer’s shoppers to use the service?)

•  Moving from Amazon’s front end stores to logistics, one can claim that Amazon is now a better logistics operator than Walmart, as it has grown its footprint of fulfillment centres, sort centers and so on – and indeed the entire Amazon Logistics business. The comparison between the two is especially enlightening when looking at delivery speed. Walmart’s two
million items (for two day shipping) is no match for Amazon’s one hundred million (prime eligible). And now Amazon is moving towards one – day prime deliveries as standard, as always keeping several steps ahead of the competition.

•  Amazon has also been highly innovative with its new warehouse and sort center robots Xanthus and Pegasus (In September 2017 Amazon had > 100k robots in their warehouses, now there are 200k) – and in future the use of drones, self driving cars and delivery robots on the other end of last mile fulfillment.

•  In terms of the marketplace there have been major changes also. In future it looks like Amazon will de-emphasize its 1 Party business and let 3P take over (apart from selected categories that are important for overall branding and shopper experience), as the marketplace generates much better margins, service sales outpace product sales, and 3P relationships can often be self service.

Table of contents