Amazon Disruption

What started with just selling books online is now a multi-billion dollar company that offers products and services that span across multiple industries. In the process of Amazon’s development, they have caused immense competition in the industries they operate in. Below are some of many they have disrupted.

Transportation

  1. Logistics

From the start to the present, Amazon has relied on third-party shipping vendors like UPS, FedEx, and DHL to deliver their products. However, as Amazon expanded, they have looked into building its own private-delivery network. The purpose for this ultimately is to increase the profit margin as well as provide faster deliveries to their customers.

Food

  1. Grocery Delivery

With Amazon’s continuous expansion, it should come no surprise to anyone in the grocery business that they were the next target. In 2007, Amazon launched AmazonFresh in hopes to deliver goods right to the customer’s door. This, unfortunately, achieved little success. Fast forward to just a couple months ago, Amazon bought out Whole Foods. No one really knows what exactly Amazon will do with acquiring Whole Foods, but some are speculating that Amazon will implement a kind of delivery system. With over 400 Whole Food stores, Amazon is able to bring grocery delivery to places that other companies are unable to reach.

This is bad news for Instacart, a grocery delivery company that directly brings groceries from stores to one’s door, because Whole Foods is one of their partner stores. Now that Amazon has power over the operations behind Whole Foods, they are unsure of what to expect next.

2. Prepared Food

A month ago, Amazon filed a trademark application for prepared food kits. This, along with the Whole Food acquisition, are concerning those who are in the meal-kits industry. One example is Blue Apron, a company that delivers boxes of pre-cut ingredients as well as instructions to cook meals meals at home. Blue Apron’s stock dropped 12% since Amazon’s announcement.

Apparel

  1. Prime Wardrobe

Recently, Amazon launched a new service in which prime members are able to try on clothing and accessories for free before purchasing. Many companies like Stitch Fix also have a similar concept.

Other

  1. Physical Books

Amazon began with only selling books online and it eventually got large enough to take down the businesses of several book stores. Before Border’s official shut down, it relied on Amazon for its profits on online sales. Not only are book sales in brick-and-mortar stores suffering, but online sales of those stores are also at a decline. Amazon dominates over 50% of online physical book sales.

2. Event Tickets

Just a couple days ago, there has been news regarding Amazon’s potential emergence into the event ticket industry. Amazon has an advantage since it already has relationships built across numerous sectors as well as stored customer information that will market the event towards the right demographics. If Amazon were to break into this industry, Ticketmaster will be expected to be at a huge loss.


Amazon also has its foot in several other industries, but they pose significantly less disruption.

  1. Videos and Channels

With Prime, Amazon allows access to a large number of movies, TV shows, and networks. The setback is that it has very limited variety as compared to video streaming services like Netflix and Hulu.

2. Music

Also with Prime, Amazon allows members to listen to an unlimited amount of songs out of a catalog of over 1 million songs. This number is very small compared to over 30 million that music streaming services such as Spotify and Apple Music have.

3. Cloud Storage

Amazon offers several options for cloud storage (for photos and files) for non-prime, prime, and paid users. Though Amazon Drive’s pricing has an edge compared to other cloud storage companies like Google Drive and Dropbox, its accessibility and functionality lacks behind the others.

Final Thoughts

Amazon has advanced so far since its initial launch. Though its involvement in different industries causes tremendous competition for other companies in those respective industries, Amazon’s goal, nevertheless, is to become the go-to marketplace. In order for Amazon to be in that position, it is inevitable that they break into new industries and improve on existing ones. In the next decade, it won’t be surprising to see Amazon become the online place for everything one can think of.