With its profound knowledge of its clients, Amazon can move into almost any sector striking fear into the hearts of competitors. And the $740 bn company is just getting started
The computer on which this article was written is sitting on a laptop stand that tells you everything you need to know about how Amazon does business. At $19.99( PS14. 99) a pop, the laptop stand combines everything customers love about Amazon: utility, cost and convenience. It’s also a total and complete knockoff– of a laptop stand that the San Francisco-based company Rain Design began selling nearly a decade before Amazon decided to make its own.
Amazon’s innovation with its own version was to replace Rain Design’s raindrop logo with its own smiley arrow logo- and cut the price in half.
” All Amazon had to do was pick the best one and copy it ,” said Rachel Greer, a former product administrator for Amazon who runs a consulting firm for Amazon vendors.
Rain Design isn’t the first company to fall victim to the aggressive techniques Amazon uses to achieve market dominance. Although its retail site is the most visible of its business strands, the $740 bn company has quietly stretched its tentacles into an astonishing range of unrelated industries. Google and Facebook might have cornered the online advertising market, but Amazon’s business successes now include groceries, Tv, robotics, cloud service and consumer electronics.
” If you try to measure power by how many executives are up at night because of X company, I think Amazon would win ,” said Lina Khan, legal fellow with the Open Markets Program at the thinktank New America.
Amazon has a restaurant delivery service, a music streaming service and an Etsy clone called Amazon Homemade. It attains hugely successful hardware and software; it induces movies, television displays and video games. It runs a labour brokerage for computer-based work and another for manual labour. It publishes volumes, sells volumes, and owns the popular social network site for volume readers GoodReads.com. It sells diapers, newborn food, snacks, attire, furniture and batteries. It sells ads, processes payments, and attains small loans. It is the unexpected owner of a huge number of websites- everything from the gaming livestream site Twitch to the movie database IMDb.
Of the top 10 US industries by GDP( info, manufacturing non-durable goods, retail trade, wholesale trade, manufacturing durable goods, healthcare, finance and insurance, nation and local government, professional and business services, and real estate ), Amazon has a finger in all but real estate.
And how confident can the real estate industry be right now that Amazon won’t at some phase decide to allow people to buy and sell homes on its platform?
” I consider them as various kinds of a great white shark ,” said Greer.” You don’t really want to mess with them .”
” It’s basically become a railroad for the 21 st century ,” added Khan.” It’s existential for so many business but also vying with all those business .”
What attains Amazon so frightening for rival businesses is that it can use its expertise in data analytics to move into almost any sector.
” Amazon has all this data available. They track what people are searching for, what they click, what they don’t ,” said Greer.” Every time you’re searching for something and don’t click, you’re telling Amazon that there’s a gap .”
Amazon knows where you live, who you live with, your current locating( “if youre using” an Amazon smartphone app ), what Tv shows you watch, what music you listen to and what websites you visit.
” It’s preoccupied with understanding its customers ,” said the Tuck School of Business professor Vijay Govindarajan.” The more you understand every aspect of a customer, the more it can satisfy your needs .”
This obsession with knowing its customers means that, while feared by almost every business, Amazon is beloved by clients. It’s viewed as cheap, convenient and reliable.
” Amazon’s north star is to delight the customer ,” said Gene Munster, a former Amazon analyst who runs an investment firm, Loup Ventures.
Despite its treasure trove of personal data- the kind that allows retailers to predict if their teenage customers are pregnant before their parents know- Amazon has largely avoided utilizing that data in ways that unnerve people.
But the consumer trust it has built up does not reflect the damage the company does to challengers, partners and workers, according to Khan.” Only looking at a consumer side of a business power is totally ludicrous. It slices the human in half , not looking at them as a worker, producer or supplier .”
Customers might be getting super-fast deliveries of inexpensive laundry detergent and binge-worthy Tv reveals, but the same company has also been accused of displacing jobs in the locations where it builds its fulfilment centres, treating warehouse employees like robots, aggressively undercutting competitors and squeezing suppliers and producers.
” The algorithm are designed to serve up things that best serve Amazon, steering us to some books and not others ,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance.” You have a company that can shape whether a particular writer is able to find an audience, and whether it is possible even get published .”