Xix) Amazon
Jeff Bezo started his online bookselling company in his garage in 1994. Amazon survived the dot com crisis and then expanded across the retail industry; changing how consumers buy products and threatened the survival of the bricks and mortar stores.
In 2018, Amazon's stock value increased by over 50%. At its IPO (1997), one share was worth US $18; in 2018 that share is worth more than us US $ 22,200 (Reuters, 2018).
· After being a major disruptor of many businesses, like traditional bookstores via on-line sales and e-books, Amazon is trying to reinvent itself. As founder Jeff Bezos states he wants to maintain the start-up mentality of continually developing new products, irrespective of margins. Some examples include
- Amazon Web Services, ie cloud computing (includes data storage and computer power in the cloud)
- third-party sales (they earn a commission that is increased when Amazon handle thier distribution and advertising) and advertising, have more than compensated for the high cost of fast package delivery and video streaming. They are working on improving efficiencies in warehousing, data centres, marketing, etc..)
- food shipment from Whole Foods Market stores around the US, ie attempting to bring groceries into the age of online retail (Jeffrey Dastin et al 2018)
- using a shop (bricks and mortar) in Manhattan (USA) to showcase its products like Kindle e-readers, Fire smart phone & Fire TV Set-Top Box, Etc
- spending US $5b. on capital expenditure in the first 9 months 2014 (in 2013 only spent US$ 2b.)
- paid US $1b. for video gaming Twitch (2014)
- purchased the "Washington Post" to push the newspaper industry into the digital age
- in 2018 Amazon subsidiary (Whole Foods) allowed customers to order their groceries online and pick up in person, ie click and collect. Its main competitor Walmart already offers this service. Whole Foods is challenging Walmart (23% of USA grocery spend) for dominance of America in a shifting retail landscape, ie
"...Amazon rules your online shopping but Walmart made inroads by incorporating digital shopping with its vast network of super centres..."
Michael Corkery 2018
The competition is most intense around fresh food as customers shop for it very frequently and prefer to see and/or feel the food before they buy.