4 Ways Amazon Is Remaking the World in Its Image
Amazon's impact on commerce is impossible to ignore. The pioneering e-tailer has nearly perfected the arts of e-commerce and logistics to bring customers the shop-from-anywhere experience we couldn't have imagined 20 years ago. Order it today, and it's in your house in less than two days from just about and vendor in the world.
But a flurry of announcements and acquisitions in the last week signaled the next stage in its plan for world domination.
Amazon has mastered a massive niche in warehouse-to-customer fulfillment via online order. Amazon is able to control most of the variables in that world, which allow it to optimize for price, delivery and overall customer experience. If you can control those three things, you can win a lot of business.
Amazon also doesn't make much money. Oh, it makes more than enough to make Jeff Bezos absolutely filthy rich, but Amazon prioritizes growth over profits to an unheard of extent. That leads to price cutting and a lot of pressure on any other business in its markets. In truth, many retailers rely on Amazon for sales, but suffer from its competition.
Now Amazon is reaching far beyond its niche in ways that could rewrite other areas of commerce. And those innovations could remake the entire shopping word in its image.
The most notable move was snapping up Whole Foods, a favorite grocery chain among affluent customers, with stores in some of the most desirable retail real estate in America. Speculation on how Amazon will use that purchase has run rampant since it was made, but the advantages are numerous.
The obvious next step would be for Amazon to use Whole Foods as a jumping off point for home food delivery, a space it's been trying to crack for years but never had the grocery distribution network to cover. That will allow it to apply the kind of logistical expertise it has in non-perishable goods to the grocery market, and compete with the PeaPods and Fresh Directs of the world.
It could also launch a subscription box service like Blue Apron; which is a big enough threat that it's actually impacting Blue Apron's IPO.
2. Amazon Prime Wardrobe
Of course, being an online retailer has limits. It's hard for customers to try on clothes from the other side of the Internet. But subscription clothing services like Trunk Club allow users to try on clothes at home and only pay for what they keep.
Yesterday, Amazon announced its own version of that service, called Amazon Prime Wardrobe. Customers in the program can order clothes that come in a resealable box with UPS return labels.
Try on the clothes, pay for what you like (currently there would be a discount for keeping multiple pieces) and return the rest.
Add the Echo Look — which combines the echo personal assistant device with a camera for personal stylist-like functionality — and you have a transformative clothes buying experience.
3. A 'Prime' Low-Income Segment
I mentioned earlier that Amazon is in the business of growth more than profits, and perhaps no move shows that more than it's price cut to Prime for low-income customers.
In order to make the savings more accessible, Amazon customers on government assistance will be able to get Prime for half price.
The move is not expected to lead to high profits or a spike in sales, but it cuts into Amazon's number one retail rival, Walmart, by making one of Amazon's biggest differentiators available to exactly the kind of customers fueling Walmart's online success.
4. Enabling and Disabling Showrooming
At the same time it was announcing the acquisition of Whole Foods, Amazon also dropped a remake of its Dash device.
The Dash connects with your smartphone to allow you to scan a barcode in a store and immediately add that item to your Amazon cart. The new version, Dash Wand, incorporates Alexa voice recognition. So you can showroom without the inconvenience of waving your showrooming device around in front of potentially offendable store employees.
But wait! In a Hall-of-Fame-worthy moment of irony, Amazon has also patented techn that would allow it to shut down showrooming in its own stores! If you didn't catch Melissa Ward's blog post all about that yesterday, give it a read.
The Future According to Amazon
As Conor Sen said in a recent Bloomberg opinion piece, "Amazon's real target isn't Whole Foods, it's everything you buy."
And it's not just about trying to make sure you do that shopping with Amazon, Amazon wants to remake how you do all your shopping into the format it's best at: Online shopping from highly optimized distribution centers.
Sure, Amazon has launched an IRL book store experiment. But even these reflect the streamlined, algorithm-optimized, Internet-reliant experience Amazon does so well. CNBC likened them to airport bookstores rather than the library-meets-coffee shop vibe of Barnes and Nobles (which are closing at an alarming rate already).
Every company claims to look to the future, and most would say they're shaping it. But few are imprinting their vision on the future to the extent of Amazon. That vision would bring almost all shopping into your home, enabled by connected devices, AI personal assistants and super streamlined logistics. And the effects of that would go beyond Amazon, forcing other stores out of business or to enable Amazon's vision.
So if you think Amazon has changed the shopping world already, just wait, because this new salvo of innovation could change the way you do business forever.