Amazon 2015

Amazon 2015


Release date: September 22nd, 2015 (156 pages)
PDF/Powerpoint format. Price: GBP1,990.00

Abstract

By judging the sheer amount of Amazon’s innovations over a 12 months period from the Twitch acquisition to Prime Day and beyond, one quickly grasps the company’s relentless energy to become the “Everything Store”. Ama- zon’s astonishing ambition that consumers should only need Amazon for their shopping and entertainment needs is unmatched and, perhaps, attainable.

This report analyses the latest activities of Amazon across its numerous business interests including food (Fresh), cloud computing (Amazon Web Service), Kindle, and on- line marketplaces, both home and abroad. These are sup- plemented with key financials and performance indicators that offer deeper insights into the company.

Amazon’s loyalty scheme Prime and the 3P marketplace are covered in depth since they are the foundations on which Amazon’s catch-all ecosystem is being built. With the stickiness these platforms provide, Amazon can afford to experiment with drones, connected kitchen devices, smartphones and so on to extend its presence in every aspect of shoppers lives.

Amazon is a fascinating and truly unique company. No other retailer has the logistical muscle and self-belief to try and monopolise shoppers’ online retail spending. Wi- thout genuine competition, Amazon’s domination may well know no bounds.

Table of contents

Executive Summary p12
Recent key developments p19
August 2014: mobile payments, Local register – a US solution first and foremost p20
August 2014: Twitch acquisition, selling physical books in Brazil, Shanghai p21
September 2014: Surge soft drink, CFO retires, Kindle e-reader and tablets in Canada p22
October 2014: Fresh entering Brooklyn, order threshold of $35 p23
October 2014: Direct shipping China, India Post p24
October 2014: Pay with Amazon in India, Sydney data centres p25
October 2014: AWS in Germany p26
October 2014: Physical store plans NY, more of a warehouse than a store? Or an office? p27
October 2014: Same-day pickup launched in the UK p28
November 2014: AmazonFresh in Philadelphia, using NY template p29
November 2014: Same day delivery in Canada, Job creation in Ireland p30
November 2014: Netherlands launch p31
November 2014: Amazon ends damaging Hachette dispute p32
December 2014: Takeout & Delivery is officially launched in Seattle p33
December 2014: Amazon Elements, pick up points in Canada p34
December 2014: Click & Collect in Spain p35
January 2015: the mobile wallet fail p36
February 2015: Prime Now available across Manhattan, Purdue campus store p37
February 2015: Purdue campus store p38
March 2015: Amazon Dash button and scanner released p39
March 2015: Bleecker Street, second Tmall shop p40
March 2015: Hyperlocal service in India, Amazon move into Toronto skyscraper p41
March 2015: Amazon Publishing enters France, change at the top p42
April 2015: AWS open Dutch office, Net-a-Porter rejects Amazon p43
May 2015: Partnership with Jet in the UK p44
April 2015: Cloud revenues, car boot delivery, Jabong acquisition called off p45
April 2015: Prime stations and increasing product eligibility by 47% p46
April 2015: Amazon sues fake review provider firms p47
April 2015: Amazon cheapest groceries provider in New York p48
April 2015: Japan sells electric cars p49
April 2015: Remote Canadian communities lose free delivery p50
May 2015: Drone testing in Canada, tax adjustments, Fire TV Stick p51
May 2015: Delivery via subway, Amazon Japan record label p52
May 2015: Amazon relaunches supply as Amazon business p53
June 2015: Launches Prime Music in the US, Prime Now in the UK p54
June 2015: Alexa, AI and machine learning improving the customer review system p55
June 2015: Antitrust investigation, Kindle, Canada, loan business to 3P sellers p56
June 2015: Developments in India and Mexico p57
June 2015: Mexico expansion p58
June 2015: Amazon relaunches private label grocery products after diaper fiasco p59
June 2015: Amazon relaunches private label grocery products p60
June 2015: Amazon launches Prime day p61
June 2015: Amazon launches Prime day p62
June 2015: Amazon grocery drive thru plans p63
June 2015: Treasure Truck in Seattle, launch shelved p64
June 2015: Treasure Truck p65
July 2015: Prime Music in the UK, Amazon TV, Top Gear, London Fashion studio p66
July 2015: Food added to Amazon Italy p67
July 2015: Spain developments, Amazon facing trademark lawsuit in SF p68
July 2015: Further investment into India, acquires former biscuit factory in Ireland p69
August 2015: Amazon to stop Collect+ service, new London data centre p70
August 2015: Stock record, Bezos cashes in, Amazon Fresh to come to the UK? p71
August 2015: new DC in Illinois, AWS in South Africa p72
August 2015: Trade-in service to close, Prime Now in Seattle, Amazon Flex p73
August 2015: Prime Now in Seattle, Amazon Flex p74
Financials, KPIs, Benchmarks 2008 – 2014 p75
Amazon: Net Sales, Net Income, Growth, Margin 2008-2014, adding $14.5bn in a year p76
Amazon: more than $13bn added every year since 2011, a $100bn retailer in 2015 p77
Amazon: US Sales, growth, international sales, in $m, % split 2008-2014 p78
Amazon: Sales by segments 2008-2014 in $m, growth p79
Amazon: AWS, transposing the marketplace model from physical to digital p80
Amazon: A couple of words on margins, what is the impact of 3P’s rapid growth? p81
Amazon: 3P has overtaken 1P in value terms p82
Amazon: The «Key» Key Performance Indicator p83
Amazon: inventories and cash flow, marketplace as the core of the model p85
International expansion strategy p86
Amazon: International expansion strategy, 3 core factors, online is global p87
Amazon: The platform, incrementalism, the threat from copy cats, Amazon’s dilemma p88
Financials, KPIs, Benchmarks in Amazon geographies 2008 - 14 p89
Amazon: International sales per country in €m 2008 -14, Germany, Japan, UK, France p90
Amazon: Int’l sales per country in €m, China, Italy, Spain, India, Brazil p91
Amazon: Int’l sales per country in €m, Australia, Mexico, Netherlands p92
Amazon: International sales per country in local currencies 2011-14, Japan, UK p93
Active customer accounts per Amazon geography and annual basket spend 2009 - 14 p94
Amazon: Active Customer accounts 2009 – 14 in m, USA, Germany, Japan, UK, France p95
Amazon: Active Customer accounts, Analysis p96
Amazon: Sales grow faster that active customers, basket growth, category cross shopping p97
Amazon: Average annual spend 2011 – 14e, USA, DE, Japan, UK, France in local currency p98
Amazon: Average annual spend 2011 – 14e on AMZN 1P, Analysis p99
Amazon: 1P Sales by geography in $m, average price, total units, customers, frequency p100
Amazon: average price, total units, customers, frequency per country, Analysis p101
Amazon: Best seller average prices 2013, 2014, 2015 TD in local currency p102
Prime: the loyalty scheme par excellence 2009 - 14 p103
Prime – behind the “death of bricks & mortar loyalty”? p104
Prime: What we know and what we have to estimate p105
Prime: retention and the importance of the streaming business p106
Prime: How big can membership grow? Adding new features p107
Prime: Prime Now adding a service and premium layer p108
Prime: Prime day, essentially impossible to copy for competitors p109
Prime: Prime Customer accounts 2009 – 14 in m, USA, Germany, Japan, UK, France p110
Prime: The jewel in the loyalty crown, past strategy: stable price - more content p111
Prime: focus on most loyal shopper to drive sales and profits p112
Prime: Most successful tool to get buy-in to new categories, net costs, uplifts p113
Prime: the 7 key Prime benefits to Amazon (I) p114
Prime: The 7 key Prime benefits to Amazon (II) p115
The core of the business model: the marketplace p116
Strengths of marketplaces: The model p117
Strengths of marketplaces: the data benefits p118
Strengths of marketplaces: the data benefits, pricing power p119
Strengths of marketplaces: pricing power, beneficial cash flow p120
Strengths of marketplaces: beneficial cash flow, unlimited range p121
Strengths of marketplaces: unlimited range p122
Strengths of marketplaces: network effects p123
Amazon’s marketplace 2010 – 14 p124
Amazon marketplace: the game changer p125
Amazon MP: 3P commissions and fees, another 10% for FBA, risk of being replaceable p126
Amazon: Net product, service sales, units shipped, 3P % share 2009-14 p127
Amazon: The main marketplace winner, contribution in value terms (in US $m) 2010-14 p128
Amazon MP: 3P sales in US$m in 2010 – 2014, 3P bigger than 1P p129
Amazon marketplace: rapid expansion financed through marketplace cash flow p130
Amazon marketplace: stocking stores versus populating a website, long tail economics p132
Amazon forecasts 2010 - 16 p133
Amazon forecast: Amazon’s sales in US$m 2010 – 2016 p134
Amazon forecast: Amazon’s 3P sales in US$m 2010 – 2016 p135
Amazon forecast: Amazon’s GMV in US$m 2010 – 2016 p136
Connected kitchen devices – Dash buttons p137
Amazon Dash: scan and button, all invite only and Prime for now p138
April 2015: Amazon Dash as FMCG giants’ tool p139
April 2015: Prime conversions on grocery at 60% p140
Others: Chronodrive partnership with Hiku, Waitrose, Carrefour Belgium p141
Carrefour: connected kitchen in Belgium, a great step forward in food retailing? p142
Connected kitchen devices: 5 common characteristics and benefits p143
Table 1: Amazon: Net Sales, Net Income, Growth, Margin 2008-2014, adding $14.5bn p76
Table 2: Amazon: US Sales, growth, international sales, in $m, % split 2008-2014 p78
Table 3: Amazon: Sales by segments 2008-2014 in $m, growth p79
Table 4: Amazon: International sales per country in €m 2008-14, Germany, Japan, UK, France p90
Table 5: Amazon: Int’l sales per country in €m, China, Italy, Spain, India, Brazil p91
Table 6: Amazon: Int’l sales per country in €m, Australia, Mexico, Netherlands p92
Table 7: Amazon: International sales per country in local currencies 2011-14, Japan, UK p93
Table 8: Amazon: Active Customer accounts 2009 – 14 in m, USA, Germany, Japan, UK, France p95
Table 9: Amazon: Average annual spend 2011 – 14e, USA, DE, Japan, UK, France in local currency p98
Table 10: Amazon: 1P Sales by geography in $m, average price, total units, customers, frequency p100
Table 11: Amazon: Best seller average prices 2013, 2014 – 2015 TD in local currency p102
Table 12: Prime: Prime Customer accounts 2009 – 14 in m, USA, Germany, Japan, UK, France p110
Table 13: Amazon: Net product, service sales, units shipped, 3P % share 2009-14 p127
Chart 1: Prime – behind the “death of bricks & mortar loyalty”? p104
Chart 2: Strengths of marketplaces: The model p117
Chart 3: Amazon: The main marketplace winner, contribution in value terms (in US $m) 2010 - 14 p128
Chart 4: Amazon MP: 3P sales in US$m in 2010 – 2014, 3P bigger than 1P p129
Chart 5: Amazon forecast: Amazon’s sales in US$m 2010 – 2016 p134
Chart 6: Amazon forecast: Amazon’s 3P sales in US$m 2010 – 2016 p135
Chart 7: Amazon forecast: Amazon’s GMV in US$m 2010 – 2016 p136
Chart 8: The benefits – Darty p146