Metro

  • Written by Venkatesh Shankar, Professor of Marketing; Director of Research, Center for Retailing Studies, Texas A&M University

A quarter of a century ago, on July 5, 1994, a company, which shared a name with the world’s largest river, was incorporated. It sold books to customers who got to its website through a dial-up modem[1].

It wasn’t the first bookstore to sell online. (Books.com launched in 1992.) But it behaved like a local store, whose shopkeeper knew customers by name – a bell even rang in the company’s Seattle headquarters every time an order was placed[2].

Amazon’s founder, Jeff Bezos, set his sights on making it an “everything store.” The company would go on to become not just an everything store, but an “everything company.”

Today, 25 years later, Amazon has reshaped retailing permanently. It is one of the top three most valuable companies in the world, with a market capitalization hovering around US$1 trillion, greater than the GDP of nearly 200 countries[3].

If you had bought $100 worth of its IPO shares in 1997, it would be worth about $120,000 today.

Redefining retail

Amazon continually took shopping convenience to newer levels.

Before 1994, shoppers had to travel to stores to discover and buy things. Shopping used to be hard work – wandering down multiple aisles in search of a desired item, dealing with crying and nagging kids, and waiting in long checkout lines. Today, stores try to reach out to shoppers anywhere, anytime and through multiple channels and devices.

After first experiencing two-day free shipping from Amazon’s Prime membership program, shoppers started expecting no less from every online retailer. About 100 million shoppers worldwide have Amazon Prime[4].

The company made shopping more convenient through features like one-click ordering[5]; personalized recommendations; package pickup at Amazon hubs and lockers[6]; ordering products with the single touch of a Dash button[7]; and in-home delivery with Amazon Key[8].

Shoppers can also search for and order items through a simple voice command to an Echo or by clicking an Instagram[9] or a Pinterest[10] image. Amazon now even has a cashierless “Go” store[11] in Seattle.

Amazon has been a factor in the rising closures of brick-and-mortar stores that can’t keep pace with the changes in retail. In the first 15 weeks of 2019 alone, there were about 6,000 store closures in the U.S. overall, higher than the number of closures in all of 2018. Analysts fear a coming “retail apocalypse.”[12][13]

A major employer

Amazon’s impact extends to other industries[14], including smart consumer devices (Alexa), cloud service (Amazon Web Services), and technology products and services (drones).

Such is Amazon’s impact that industry players and observers use the term “Amazoned”[15] to describe their business model and operations being disrupted by Amazon.

Today, Amazon is the largest tech employer by far. It employs more people[16] than the next five tech companies combined. No wonder Amazon created such a buzz last year before selecting a location for its second headquarters[17].

Amazon’s work culture is intense. It has a reputation as a cutthroat environment with a high employee burnout rate[18]. It is automating as many jobs as possible[19], mostly in warehousing.

At the same time, after criticism from policymakers, Amazon stepped up in October 2018 by raising minimum wage for all U.S. employees to $15 per hour[20].

Faced with growing criticisms about the mounting impact of Amazon’s boxes and other packaging material on the environment, Amazon has pledged to disclose more information about its environmental impact at the end of 2019[21].

The next generation

What’s in store for Amazon’s future?

Amazon is turning 25 – here's a look back at how it changed the world The Amazon Echo Plus. ClassyPictures/shutterstock.com[22]

Bezos has said that Amazon’s efforts focus on preventing it from dying[23]. As he noted at a 2018 all-hands meeting, “Amazon is not too big to fail.”

As a professor of marketing[24], having conducted research on online retailing and analyzed hundreds of cases, I believe that Amazon’s future, like shoppers’ and the society’s future, is inextricably linked to the rise of artificial intelligence. Starting with Alexa, the company’s virtual assistant[25], Amazon is betting on AI.

In fact, Amazon is testing anticipatory shipping[26], a practice in which it anticipates what shoppers need and mails them the items without shoppers ordering them. Shoppers could keep the items they like and return those they don’t want at no charge.

Amazon is turning 25 – here's a look back at how it changed the world A diagram in Amazon’s patent for anticipatory shipping. Google Patents[27]

More immediate questions relate to Amazon’s entry in two stodgy yet critical industries: health care and financial services.

Although Amazon has disrupted many industries, these two are heavily regulated industries in which the company hasn’t had much experience.

Amazon is considering becoming a major player in the pharmaceutical and the health insurance markets[28]. In May, it acquired online drugstore PillPack for $1 billion to crack the $500 billion market for prescription drugs[29] and has formed a joint health venture with Berkshire Hathaway and JP Morgan Chase[30].

Meanwhile, with 310 million customer accounts, Amazon is building a suite of high-tech financial services[31], such as Amazon Cash[32], a way to add cash to your online balance, and Amazon Pay, an online payment service. These programs are aimed at developing markets such as India, which has a huge population that does not use banks.

Amazon has reshaped retailing permanently in the last 25 years. In the next 25, it might totally redefine how the world shops.

References

  1. ^ a dial-up modem (www.youtube.com)
  2. ^ every time an order was placed (www.businessinsider.com)
  3. ^ greater than the GDP of nearly 200 countries (worldpopulationreview.com)
  4. ^ have Amazon Prime (fortune.com)
  5. ^ one-click ordering (knowledge.wharton.upenn.edu)
  6. ^ package pickup at Amazon hubs and lockers (techcrunch.com)
  7. ^ with the single touch of a Dash button (www.theverge.com)
  8. ^ in-home delivery with Amazon Key (www.cnet.com)
  9. ^ Instagram (smallbiztrends.com)
  10. ^ Pinterest (blog.bqool.com)
  11. ^ cashierless “Go” store (www.youtube.com)
  12. ^ higher than the number of closures in all of 2018 (footwearnews.com)
  13. ^ “retail apocalypse.” (www.washingtonpost.com)
  14. ^ extends to other industries (www.forbes.com)
  15. ^ the term “Amazoned” (www.bloomberg.com)
  16. ^ employs more people (www.statista.com)
  17. ^ selecting a location for its second headquarters (www.citylab.com)
  18. ^ a cutthroat environment with a high employee burnout rate (www.businessinsider.com)
  19. ^ automating as many jobs as possible (www.theverge.com)
  20. ^ raising minimum wage for all U.S. employees to $15 per hour (www.cnbc.com)
  21. ^ disclose more information about its environmental impact at the end of 2019 (www.ttnews.com)
  22. ^ ClassyPictures/shutterstock.com (www.shutterstock.com)
  23. ^ focus on preventing it from dying (www.inc.com)
  24. ^ As a professor of marketing (scholar.google.com)
  25. ^ Alexa, the company’s virtual assistant (www.theverge.com)
  26. ^ Amazon is testing anticipatory shipping (www.smartdatacollective.com)
  27. ^ Google Patents (patents.google.com)
  28. ^ the pharmaceutical and the health insurance markets (www.cbinsights.com)
  29. ^ online drugstore PillPack for $1 billion to crack the $500 billion market for prescription drugs (www.cnbc.com)
  30. ^ formed a joint health venture with Berkshire Hathaway and JP Morgan Chase (www.modernhealthcare.com)
  31. ^ Amazon is building a suite of high-tech financial services (fintechnews.ch)
  32. ^ Amazon Cash (techcrunch.com)

Authors: Venkatesh Shankar, Professor of Marketing; Director of Research, Center for Retailing Studies, Texas A&M University

Read more http://theconversation.com/amazon-is-turning-25-heres-a-look-back-at-how-it-changed-the-world-118307

Metropolitan republishes selected articles from The Conversation USA with permission

Visit The Conversation to see more

Entertainment News

REBECCA “DAWGGONE" DAVIS” Weight of the World

When people hear my song “Weight of the World” for the first time, they always wonder if I somehow knew 2020 would be a year like no other in our history. Was there any conscious thought predictin...

Rebecca Davis - avatar Rebecca Davis

WENDY MOTEN I’ve Got You Covered

WENDY MOTEN may have launched her career as a pop/R&B artist and taken cool detours into jazz along the way, but her heart clearly belongs to NashvilleWendy Moten may have launched her career ...

News Company - avatar News Company

Smooth Jazz Music Legend “Dr. Dave” Releases An Homage To The Tonight Show

Writing and recording smooth jazz albums and performing live over the past 25 years, I’ve learned that people react most powerfully to a song’s rhythms. If you’ve got a great beat that they can mo...

Dr. Dave - avatar Dr. Dave

Singer/Songwriter Darrell Kelley Talks Music and Social Relevance

I feel very blessed that two of my songs, “The Coronavirus” and “Because of You,” are currently in the Top Five on the World Indie Music charts and continue to grow in influence, with over 100,0...

Darrell Kelley - avatar Darrell Kelley

How to Create a Melody on the Piano

Have you ever wondered what it would be like to be able to write a song? Maybe you’ve wondered how anybody goes about writing a song? Once you understand how music works, you can use building b...

News Company - avatar News Company

MUSIC SENSATION WILLIE J RELEASES NEW SINGLE TO AID CORONA RELIEF

In the midst of the devastating COVID-19 pandemic, the release of “In the Morning” on Pure Mission Entertainment – the label he partners on with Aaron Emig - follows on the heels of the global s...

Tom Estey - avatar Tom Estey

Expert Advice: Indie Record Producing and Engineering

My career as an independent artist evolved out of my career as an entrepreneur and restaurant owner. I moved to from my hometown of Boston Atlanta in 2013 and opened my soul food restaurant Soul D...

Darrell Kelley - avatar Darrell Kelley

Weight of The World

When the calm of the world is at stake, and every message of hope is crucial to our collective peace of mind and the endurance of the human spirit, it’s not only possible, but essential to present any...

Tom Estey - avatar Tom Estey

DARRELL KELLEY “The Coronavirus”

Even though I have been releasing tracks and albums since 2018, I never considered myself an artist until I started getting responses from people telling me that my songs were resonating with them. ...

DARRELL KELLEY - avatar DARRELL KELLEY

Metropolitan Business News

New Research Highlights Opportunities for Sports Betting

Revenue Stream for Sports’ Post-COVID-19 Recovery Strategies New Rochelle, NY, June 1, 2020— Twenty-four states have now legalized sports betting, with more states considering legalization la...

Len Stein - avatar Len Stein

How to make overseas transfers easier?

Mainstream banks can charge as much as $20 just to process a basic international money transfer. Fortunately, today people are not doomed to handling personal finances only through mainstream gl...

News Company - avatar News Company

The flourishing international market of fragrance and perfume

There is something special and unique about the art of fragrance. This is a big world and there are quite literally a lot of smells around at any given time. In fact, as one of the five human senses i...

News Company - avatar News Company

Impact of good marketing on sales

Sales and marketing are brothers as they go hand and in hand. The job of both of these departments is to generate revenue so that an organization can make money. A company that does not generate rev...

News Company - avatar News Company

7 effective tips for increasing sales in retail

It seems that retailers have drawn a difficult lot in the 21st century: competition from online retail is growing steadily. After all, Internet retailers can sell your products at significantly lowe...

News Company - avatar News Company

10 Reasons to Use Labels

People cannot stop biting their nails, considering the messy condition of their homes. You open your kitchen drawer to grab some utensils, but instead, you take a glance at toys lying inside that dr...

News Company - avatar News Company

Holidays

5 COOL GADGETS TO CARRY FOR A SAFE TRIP

Are you planning to go on a trip? Possibly, you do not know what things are most necessary on a trip. In this article, we will guide you through some important tips. These tips help you to...

News Company - avatar News Company

New Baggage Regulations to Help Aussie Parents Travel with Infants

Travelling around the globe has never been easy, especially when infants tag along for the trip. One of the main issues that parents often have to deal with is the need to bring extra item...

News Company - avatar News Company

Maya Beach Opens to Tourists

Despite recent reports that Southern Thailand's famous Maya Beach will close for three months this year, in fact no decision to this effect has been made by Thai authorities. Phi Phi Nati...

Maevadi Rosenfeldt - avatar Maevadi Rosenfeldt



METRO DIGITAL NEWS

Breaking News & Opinion