Top Amazon Predictions for 2018
As a futurist I wrote articles on Amazon in 2017, maybe more than anyone. This is simply put, because Amazon is a highly entertaining company to watch and is a pioneer in technological innovation, logistics, business strategy and one day, in artificial intelligence. That day is quickly approaching.
In 2017 and 2016 I was named one of LinkedIn’s Top Voices, but as an amateur futurist I’ve been covering Amazon unlike anyone else. While I was recognized in the Marketing category, it’s really writing about Technology and Retail where I have stood out.
What’s the role of a futurist if not to point out the obvious, those predictions about the company most in the news, in board room calls and in the business world.
So here are my picks for Amazon in 2018.
1. Amazon Prime Members Will Break 100 Million
Amazon generated $6.4 billion in revenue in 2016 just via Prime membership subscribers. In 2018, Amazon Prime membership will increase faster overtaking the likes of Netflix (now around 111 million). This is important because as a dominant force in the smart speaker market (72%), Amazon offering premium Voice AI skills means it’s building the app store of the future of convenience.
Amazon Prime is nothing short of the best customer retention strategy of any company in the world. With Amazon Prime Video and their foray into grocery, Amazon can start to think of getting into things like HealthTech and banking for the most ubiquitous customer-centric data in the world before they grow their advertizing business that will disrupt Facebook and even Google themselves. Growth of Amazon Prime is simply then, a mirror of how Amazon scales over time.
2. Amazon will be a 1 Trillion Dollar Company
In 2018, Amazon will differentiate how it is scaling and rise past both Alphabet (Google) and Apple. It may not become the first company to reach the trillion dollar threshold, but it’s guaranteed to become one and likely in 2018 or 2019.
In 2018, Amazon finds new ways to be indispensable to our lives, and that’s not just a question of need, but of access to entertainment, healthcare and a very serious play on enterprise software integrations that are smart and work together.
3. Amazon will Rule India’s future of E-commerce
While locally owned Flipkart did very well during the festive season in India, Amazon’s presence there continues to grow in leaps and bounds in one of the fastest growing E-commerce markets in the world. A few Billions of dollars of investment there has the potential to be a cash cow for decades to come.
In 2018, we’ll begin to see Amazon pull away from Flipkart.
4. Amazon Announces the City for its Second Headquarters
After a successful PR campaign simply with its RFP for bidders for its HQ2, one of the most read RFPs in history, with 238 bidders and some pretty significant offers full with tax breaks. All to become the next Seattle?
While Amazon was a big job creators in 2017, it’s also showing signs that it could automate much of the retail jobs it’s creating, in the E-commerce warehouse itself. In fact, it must keep doing this to keep pace with Alibaba and JD.com.
Big cities like Chicago, New York or Toronto have next to zero chance to landing Amazon. Same deal with cities on the west coast. For access to talent and the right culture, that leaves pretty slim pickings.
Amazon said 54 states, provinces, districts and territories in the United States, Canada and Mexico were represented in the bids. What all the hoopla demonstrated is that Amazon is the most consumer centric company with the best media PR in all of tech. Google might own search and Facebook might own traffic, but Amazon owns consumer trust, awe, shock and a mania in 2017 that was only overtaken by Bitcoin and briefly by yes, Donald Trump.
After reading dozens of articles and listicles on all the places that have applied, I’m convinced it will be one of three places: Austin, Denver or Pittsburgh. I just don’t see many other locations even standing a legitimate chance.
5. Amazon Will Scale AmazonGo Stores and Get Smarter at Bricks and Mortar
Amazon appears nearly ready to scale its cashierless AmazonGo stores and dial in how opening up more physical stores. These will come in many shapes and sizes including tech kiosks, bookstores, AmazonFresh Pickup locations, AmazonGo stores and new kinds of stores yet to be seen. As Walmart tries to become like Amazon, Amazon must also outdo Walmart at their own game.
There aren’t many Amazon book stores or AmazonGo stores up and running yet, but in 2018 there will be a lot more. Whole Food stores will also be suited up with new tech. Amazon will continue to experiment with pop-up stores in Malls and in existing retail locations such as Kohl’s.
6. Amazon’s Alexa Will Become Ubiquitous with Voice-AI
Many smart screens and smart speakers will enter the fray in 2018, including smart screens from Google and Facebook, but Amazon already owns the next iterations of what apps will be on the interface that will be everywhere. The Alexa Skills Kit will scale, and even faster than it did up till now. This is because to reach consumers, is to have a skill accessible to everyone that owns Amazon devices. This is a battle that, Google has already lost.
I go into more detail on this here.
7. Amazon will enter HealthCare in 2018 and Banking in 2019
Amazon executives have witnessed the cryptocurrency exchange boom, and they’ll wish they were there too. Amazon is working on entering the HealthTech scene with their secretive division called 1492. They are widely rumored to be entering how we get our drugs (and how we take them) to take on the new merger of CSV and Aetna. This is the real second act of Amazon. It all begins in 2018. Whole Foods was a healthy acquisition, but grocery is by no means the last act of Amazon’s acquisitions and innovations.
8. Amazon will go on an Acquisition Spree
It’s not necessary to build it and they will come, if you are Amazon. You can acquire your way to becoming an advertizing, physical retail and robotics superpower, and they will. It’s widely suspected Amazon could acquire the likes of Slack or even Snap Inc and get more into digital media and messaging. Amazon needs a social play, as it already has the trust of consumers, something that will continue to inflate with value.
If Walmart’s acquisition of Jet was too little too late in the race to online shopping supremacy, Amazon can continue to build their consumer base before they become the kind of advertising giant we know they will be after the age of Google and Facebook. Amazon is in the position of being the one to not only dethrone the duopoly of the unregulated algorithm, is the one firm that can stand in the way of the rise of Chinese tech giants globally. But to do it, Amazon needs to keep acquiring companies that bolster it.
Amazon simply doesn’t need a Nordstrom, Warby Parker or Lowe’s, it can diversify and add talent to help it compete in artificial intelligence. Every year the pace at which E-commerce is growing will be speeding up, and due to Alexa in 2018 it will be significantly faster. As voice activated shopping becomes more the new normal, Amazon will be able to afford to go on a shopping spree of its own.
9. Amazon as an AI and Exponential Tech Leader
In a world of patents, few can keep up with juggernauts like Amazon and surprisingly, Huawei. This gives such companies huge leverage in how the future of technology is shaped. The way Softbank and Tencent are investing in the future of tech, is nothing but stunning. However, being an innovation-native company, Amazon will become more sophisticated in the kind of hardware it produces that connects the dots for consumers.
Let’s face it, Apple failed to bring us another breakthrough product. But Amazon is mostly likely to do so in 2018. Whether that’s Alexa Smart glasses, or just smarter iterations of Alexa “routines” (bunches of skills that you can customize), Amazon is at the point where it can become a serious player in the future of how exponential technology unveils itself to humans in the next two decades. In 2017, Amazon outcompeted Google in the Cloud and in Voice-AI, gained momentum in entertainment and showed signs that it could become a serious player in digital advertising.
However, the sweet spot for consumer fulfillment of Amazon is point to a future of automation. Fully autonomous drone air balloons delivering nearly instantly, and a logistics and robotics system that can’t be beat. Obviously what this becomes is consumer facing artificial intelligence, consumer facing robots and consumer owned 3D-printing, biotech data and a whole lot more than food, retail and on-demand shopping. In 2018, Amazon will show a sign of how its end-game is not a 5-year plan type deal, but expands into decades and perhaps even centuries. Don’t be shocked when Amazon is one of the key firms that helps take homo sapiens, us, to Mars.
10. Amazon Redefines what Online Shopping Becomes
If Amazon owns around 44% of the online shopping market in the U.S., how it grows basically determines how E-commerce continues to scale in 2018. Amazon is working hard at its own in-house brands know and ever new products in its marketplace that now includes the likes of Ikea to Nike, Amazon makes or breaks other businesses. It can take on apparel, make marketplaces like Etsy obsolete, disrupt athleisure and out-bid Walmart’s multiple acquisitions to become a discount apparel and fashion player we actually care about.
As Alibaba brings biometrics “smile to play” to the mainstream, opens up automated cafes and gives Starbucks AR games in China, Amazon must keep pace in how the leading firms are redefining what E-commerce even means. Amazon Prime Day must keep pace with how Single’s Day is scaling, and it’s not so easy, but in the process it means Millennial consumers find E-commerce their native way of shopping. This has already occurred for Chinese consumers where the likes of WeChat and Toutiao outduel anything the west has to offer in terms of minutes per day and user retention. Amazon has to get in on the magic. Amazon does have a neat AR innovation in its app with AR View, but must convince us in 2018, that voice-activated shopping is for real.
As it turns out, what “online shopping” is, is still evolving and Amazon still has room to show that it’s a pioneer. Not only is Alibaba copying Amazon’s model, Amazon must compete with the likes of Walmart, Google and Alibaba simultaneously. To do this Amazon must beat out Google Express, that has partnered with multiple retailers. There’s little reason to expect Google to out duel Amazon in shopping via smart speakers. We’re still not quite in the age however, of when immersive showrooming in VR and other channels of E-commerce actually become the new normal.
11. Amazon Must Cure Consumers of the Trust Apocalypse
In a year that saw how we view Facebook plummet and even how Google and YouTube’s algorithms cause harm, Amazon has been the savior for American jobs amidst a brutal year of retail store closures roughly translated into what we term the retail apocalypse.
As Walmart itself is rolling in robots to more stores, both to clean and do inventory via shelf scanning, the age of self-driving retail is coming and we know drivers, cashiers to delivery people will soon be obsolete. Robots and drones can deliver, cars can drive themselves, and computer vision and QR codes that make the POS remote, replaces not just cashiers but the very way we conceive of the “checkout experience”.
Amazon not only understands consumers, consumers trust Amazon. That’s a very valuable commodity these days, more valuable perhaps than Whole-Foods or the incredible financial viability of AWS. You can’t buy trust, it must be earned. With former Facebook employees coming out and speaking transparently at what Facebook has become and the dark and sinister neuro-psychology used to retain and exploit the vulnerabilities of users on their apps, and horrible YouTube channels geared at children as well, our mistrust of those algorithms and how exploitive Facebook and Google are, is basically at an all-time high. Amazon must leverage this moment of mistrust, a mistrust of Millennials that extends to banks, government, politicians, colleges and the idea that wealth-inequality and the inherited privilege at the foundations of capitalism itself, is good for society.
Amazon Must Cure the Trust Epidemic.
Getting into healthcare, banking that’s customer centric and based on AI, and being more than just a retailer and logistics machine, Amazon can begin to do that and contribute to its high trust among consumers. Amazon can be like the cryptocurrency of tech companies, it has an opportunity to not only be better than Netflix and Google at what they are good at, but do things differently than Facebook or Apple did, who clearly only care about profit margins. Amazon has shown it cares about being customer-centric and about growth. Those are both just end-results of trust. Trust is paramount, and even Amazon’s PR engine is designed finally to do one thing really well and that above all, make us trust Amazon as part of our future.
12. Amazon Wants our Financial Customer Data
Have you noticed more and more banks are getting Alexa Skills? The way we communicate with financial services will change radically in 2018. In 2018 Amazon will further integrate with 2nd wave internet companies the likes of Stripe and Shopify, and while Walmart Pay and Paypal continues to grow rapidly, they are not part of the end-game of financial customer data.
Because of Alexa, Amazon Pay becomes more synonymous with transactions in 2018. When I step into an AmazonGo store, I just sign-in with a QR code (china style). As voice search evolves, Amazon will be privy to the kind of detailed data on consumers Google possesses. Getting more access to customer financial data is key though, and increasingly Amazon will position itself to get into banking, lending, investing and not just payments. What if Amazon acquired someone like Coinbase? That would make sense to lock-down Millennial consumers who are eager for a new paradigm. Consumers would opt-in far more to an Amazon Bank, than say, a Facebook Financial.
13. Amazon Will Continue to invest in AWS
AWS has quietly become a very reliable pillar of Amazon’s revenue-generating empire and re-investing in its growth will be a top priority in 2018. To maintain its lead in the Cloud is very important for Amazon as it continues to grow new businesses. Amazon wants to rule the market (online and grocery), the home, enterprise and the cloud; and thus create ubiquitous AI in every sense a 360 degree consumer fulfillment solution. Bolstering enterprise solutions, is highly lucrative.
14. In 2018 Amazon will become a Leader in Hardware
In 2017 we saw how ubiquitous Alexa devices have become, it’s a grand family of smart devices including Dot, Echo, Echo Show, Spot, etc…They must continue this with more smart devices including their Amazon “Ice” smartphones. It must compete directly with Google Pixel phones and beat them. Amazon has already shown a maturity in hardware that pending the sale figures of a late Apple HomePod, a slow Facebook Building 8 division, and somewhat suspect Google devices, can truly make its mark in 2018. Alexa Smart glasses, may be ready by then. This is a device that I think could eclipse the somewhat slow Apple Watch 2 and wearable market.
15. Amazon Must Establish Partners with Smart Startups
In 2017 we saw Amazon and Microsoft get closer, while a feud intensified between Amazon and Google, while Apple is by no means a friend. However, Amazon is also positioning itself to relate better to the startups of the future; namely the likes of Stripe, Shopify, Salesforce, etc... These are companies that are “sure-bets” in their respective verticals that could become very ubiquitous in the future.
Google partnering with Walmart in a big way in 2017, means that effectively Amazon has no choice but to look for more agile smarter partners that could pay dividends down the line. As the list of Amazon’s direct competitors keeps growing, in 2018 Amazon will give more thought to its partnerships that can keep it always one step ahead of the competition.
There are many sides as to what this could mean. Recruiting AI talent in China as the same pace as Google and Facebook is important. Bringing on big attractions to its Media side and Amazon Prime Video is also key, the UFC comes to mind. What they are doing with Alexa for Business at WeWork locations fits this bill and there’s a lot more behind the scenes that we aren’t privy to that will come to light in 2018.
16. Amazon in 2018 Will Start to Think about Becoming a Robotics Company
As Amazon matures in its chosen and core verticals, it’s plan for the future may include in addition to healthcare and banking, consumer robotics and Biotech. The reason is simple, these are huge massive verticals that scale well and can add incredible value to their business, customer retention and consumer fulfillment paradigm. While Softbank in particular is showing a tremendous investment in Robotics, consumer facing robots will begin to be more lucrative in the early 2020s, and Amazon will want in.
Here’s what we know. We’re on the cusp of an automation economy, where many repetitive tasks will be done differently. The dominant tech firms must be AI and robotics native firms to compete. In 2017, Amazon already saw a 50% increase in robots from the year before. In 2018, Amazon Robotics will make leaps and bounds in order to prepare for what’s coming.
It’s all fair and well to see the orange Kiva bots grow in Amazon warehouses, but for Amazon, it’s falling a bit behind Chinese robotics companies and even their E-commerce warehouses. With even Walmart is showing an interest in robots for their brick-and-mortar stores that should put Amazon on edge. If Amazon fails to make strides in robotics, both supply chain and consumer facing; China and Asia could easily have a stranglehold on the future of robotics.
We already know how this plays out, we know how the robot to employee ratios goes from here in big time employers like Walmart and Amazon. This America idea that these are great job-creators of our time, well just pay attention in the next twenty years to see if this still holds true. Robotics in the real world will mean everything from a complete overhaul of the construction industry, to how smart drones handle natural disasters, to how nano-bots interact with our bloodstream, organs and brain. It will be as big as how transportation and retail will be transformed in the next five years. Finally the impact of consumer facing robots in the home and in healthcare could be significant in dealing with an aging population.
Amazon needs to do better than adding around 15,000 robots year-on-year, soon that will not be enough to compete. It’s hard for us to imagine in 2017, the scale of robots in future decades. When we think of IoT, we are talking about billions of connected devices, but what, those devices became smarter all at once? That is what we will witness and Voice-AI seen with Alexa and Google Assistant, is just the beginning.
2018 is a Critical Year in how Amazon Scales
I believe that 2018 will be seen as the most critical year in how Amazon evolved, ten years from now. Founded in 1994, Amazon has yet to hit its stride or anything quite like a plateau yet and probably won’t do so for another six years by 2024. Amazon will only be 30 by then, and amid all the noise of Silicon Valley, from the corruption of Uber, to the twisted algorithms and dopamine-amped apps, Amazon fulfills our needs like no other company today. As such, it’s growth has value not just for new jobs, but for how a vulnerable Middle Class and bottom 60% adjusts to the next wave of automation.