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What the Amazon effect means for retailers

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What the Amazon effect means for retailers

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It's no secret that people are spending more and more time online. It's also no secret that much of that time is spent, well, spending.

However, a lot of the money going to online retailers is money that used to go to brick-and-mortar businesses. Amazon may be the main culprit, but it's far from alone. As more and more shoppers head to screens instead of stores, brick-and-mortar retailers need to offer better customer experiences if they're to have a future.
The Amazon Effect
The Amazon effect has dramatically changed the way we shop since the company debuted in 1994. This term describes the effect that the entire digital marketplace has had on traditional forms of commerce, like brick-and-mortar retail. Namely, the Amazon effect has introduced consumers to an almost completely frictionless shopping process with near-immediate results (more and more, this refers to delivery, too).

However, the Amazon effect has also spilled over into more traditional spaces. Customers now want the same experience, whether they're in front of their computers or inside a shopping mall.
Three Ways Retailers Can Counter The Amazon Effect
The very real impact of the Amazon effect can be seen all over the world. Every year, more retail locations close down. Those that want to continue will need to take a page -- if not several -- out of Amazon's book by offering customers a technology-driven experience that meets their lofty standards.
1. Use brick-and-mortar to support online stores.
While physical spaces still serve a purpose, many companies are rethinking what that purpose is. One result has been new-age retail stores like Nordstrom Local, a clothing store with no dedicated inventory. Customers can pick up their online orders and make returns. Beer, wine, cold-pressed juices and espresso are available, too. There are onsite tailors. Nordstrom Local and stores like it are designed to serve the online experience, not compete with it.

Another company taking a similar approach is Rent the Runway, an online subscription service that lends clothing to its customers. CEO Jennifer Hyman recently made it clear at the NRF Big Show that its stores account for less than 10% of its sales. Rather, they're "supplemental to the customer experience." These stores are for customers who want in-person style tips and product advice from one of their professional stylists. This kind of personal attention wouldn't be possible through a screen.
2. Track customer behavior in store.
Everyone knows that you can use analytics to improve your website, but these digital tools are now increasingly effective in offline stores, too. E-commerce websites were the influence behind candy retailer Lolli and Pops literally tracking the paths customers take once they enter its stores.

The insights have already paid off. For example, the company found that one of its locations wasn't seeing the same revenue coming from its high-sales sweets section. After checking in-store analytics, they found that there was a table in the way that deterred customers from exploring the area in which these items were located. These analytics also help them better train their staff to engage with customers, including offering them free samples.

Using this type of technology has allowed Lolli and Pops to almost completely forego a marketing budget, relying almost solely on their customer service instead.
3. Leverage mobile technology in store.
A recent study done by SOTI found the following:

* 92% of shoppers prefer stores that offer mobile experiences.

* 73% want mPos for quicker checkout times.

* 65% want location-aware coupons.

* 61% would choose using a kiosk over speaking with a sales associate.

* 47% expect personalized service.

In this way, mobile and offline stores can work together to accommodate shoppers who are becoming more independent. They already know what they want when they enter a store. The retailer's opportunity is in providing a mobile experience that will make it as easy as possible for them to acquire it as quickly as possible.

According to a Forrester Report, $1.26 trillion worth of offline retail sales were influenced by digital media in some way. The same report estimates that number would be $1.4 trillion in three more years.

While not all of that "digital media" may have happened through mobile devices, it's clearly playing a sizable role. Furthermore, mobile technology isn't just about the shopper: 89% of retailers are expected to provide their employees with mobile technology by 2020 for everything from customer identification to customer engagement to POS and payments.

Given the demand, the potential returns and the adoption rates we've already seen, mobile-technology has widespread potential among offline retailers. Plenty of large retailers have gotten in on the act, but they're not the only ones. Montreal clothing company Frank + Oak uses its mobile app to improve customer engagement in a number of ways, including once they enter a store.

Its digital loyalty program offers customers 24-hour live-chat support, cash-back deals, free express shipping, in-store appointment booking and two-hour shipping on demand. The app also promises customers smarter, more personalized customer service the moment the user walks in the door. In fact, the app sends a signal to employees to tell them that one of their members just walked in and to offer them a complimentary cup of coffee.
The Future Of Retail
The physical stores that will be most competitive in the digital age will be those that are able to offer something online stores can't. In some cases, this will mean the opportunity to physically experience the product (e.g., Nordstrom Local allowing customers to try on clothing) or those that offer more convenience (e.g., two-hour shipping with Frank + Oak).

This is where the opportunity lies, but it will only be available to those retailers who use technology to make the most of it.

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What The Amazon Effect Means For Retailers

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It's no secret that people are spending more and more time online. It's also no secret that much of that time is spent, well, spending. However, a lot of the money going to online retailers is money that used to go to brick-and-mortar businesses. Amazon may be the main culprit, but it's far from alone.

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"Amazon Effect"

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Jamie Davidson - Amazon FBA Selling Insider

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How the "Amazon Effect" is Shutting Down Businesses

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Scott Galloway - How Amazon is Dismantling Retail

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Scott Galloway - How Amazon is Dismantling Retail

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Scott Galloway - How Amazon is Dismantling Retail

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The Amazon Effect: How Big is The Economic Impact?

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The Amazon Effect: How Big is The Economic Impact?

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Jeff Bezos, CEO of Amazon, increased his net worth by $6.44 billion dollars just by saying a few words. He announced the company's earnings on October 26, 2017, and Amazon stock jumped 8 percent. How are you impacted by the Amazon Effect?

It's true. After beating his company's earnings expectation, the increase in Jeff's 81 million shares allowed him to regain the title of richest person in the world with a net worth estimated at $90 billion dollars. This immediate wealth expansion phenomenon is simply defined as the "Amazon Effect." And, whether you realize it or not, it impacts all of us.
What is The Amazon Effect?
The Amazon Effect is the ongoing evolution and disruption of the retail market. It's the continual change in the way we shop, both online and in physical outlets, due to the ever increasing e-commerce. The broad economic impact covers everything from global inflation to the profitability of small businesses.

How big is the impact? According to eMarketer, Amazon now accounts for 43 cents of every dollar spent online in the U.S. No matter what the industry or where the business is located, it is likely that every CEO has had the thought at least once: How could Amazon impact my business?

When Bedel Financial's Investment Team analyzes individual stocks, private equity, or investments within mutual funds, we often take the "Amazon Effect" into consideration. Will the company compete against Amazon? Or, is it a potential acquisition target to enable Amazon to get into a new industry or sector?
Amazon's Impact on Wage Growth and Inflation
According to the Bureau of Labor Statistics, the U.S. unemployment rate was 4.2 percent this past September. That is the lowest it has been in the past decade. Basic economics teaches us that when unemployment rates are low, the probability for wage growth increases. That increase is partially due to the limited supply of available talent. Wage growth increases companies' costs, which in turn, often gets passed on to customers by raising product prices. When the price of products goes up, inflation, the measurement behind the increase in the cost of goods, goes up. That's the economic pattern we're all familiar with.

However, if Amazon is able to continue their disruption of traditional retail by cutting overhead costs, passing the savings onto the customers, and decreasing the profit margin of its competition, it can potentially derail the traditional pattern. As other retailers' profits decrease, so will their opportunity to increase employee wages. Although current unemployment rates are near 10 year lows, the Amazon Effect could potentially create a deflationary environment.
Latest Rumors Surrounding Amazon
Amazon is known for creating customer demand for items its customers didn't even know they demanded! They have read our minds before the thought has even entered. This is how you create a $525 billion company.

Next, is your doorstep not safe enough? The new rumor surrounds the ability for package deliverers to unlock your door remotely and place the package inside your front door while being sensor recorded for security purposes. Are we willing to allow Amazon to invade our private residence for mere convenience? Sure, why not. Please feed my dog while you're in there!

The rumor is that Amazon is targeting shipment companies like FedEx and UPS with this new delivery service. However, many analysts are critics of this rumor, citing that the costs around infrastructure and logistics are too much for even a company like Amazon. With that said, at this point, would you dare to underestimate Amazon? How much could they cut shipping costs by utilizing drone technology? Maybe FedEx and UPS are creating new technology, more advanced than drone delivery, to stay ahead of future competition.

Another rumor is around drug dealing. What if Amazon was a (legal) drug dealer? What if your prescriptions could be delivered to your door at Amazon Prime speed? Pharmaceutical delivery companies already exist, but Amazon's capital within this potentially growing industry could be a rumor to take seriously.
The Bottom Line
Over the years, Amazon's company maturation has provided an enhanced buying experience, customer cost-savings, and a previously unknown level of convenience. In its wake, many retail companies have suffered by not adapting to innovation at Amazon Prime speed. Other industries are taking note of Amazon as a potential competitor, which should be good for the customer's wallets, but could negatively impact income growth for employees of Amazon's competitors. Stay tuned!
Evan D. Bedel, CFP, is a Financial Planner and heads Generation NeXt services for Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. For more information, visit the Bedel Financial website at bedelfinancial.com or email Evan at evbedel@bedelfinancial.com.

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The Amazon Effect: How Big is The Economic Impact?

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Jeff Bezos, CEO of Amazon, increased his net worth by $6.44 billion dollars just by saying a few words. He announced the company's earnings on October 26, 2017, and Amazon stock jumped 8 percent. How are you impacted by the Amazon Effect? It's true.

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This chart shows how quickly Amazon is ‘eating the retail world’

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This chart shows how quickly Amazon is ‘eating the retail world’

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One simple chart depicts what's taking place in retail today, as many traditional players that once boasted impressive revenue growth now report slipping sales.

Amazon, essentially, is "eating the retail world," MKM Partners analyst Rob Sanderson wrote in a Friday note to clients. His chart shows Amazon, in the categories that the company serves, growing its market share, as brick-and-mortar retail sales are on the decline.
Source: MKM Partners
The widening gap over the past year between Amazon and so-called store-based retailers is particularly striking.

It's important to note that Amazon still only boasts a 5 percent share of total retail sales, excluding food, across the country, according to data from the U.S. Census Bureau, Sanderson said.

But this is coupled with big names in the retail space - Wal-Mart, Costco, Home Depot, Target - seen as losing market share as their margins shrink and dollars shift back to Jeff Bezos' company, the analyst added.

The median growth for what MKM Partners calls the top-20 U.S. retailers was 2.4 percent in the fourth quarter of 2016, 0.8 percent during the first quarter of 2017, and is forecast to decline by 0.2 percent in the second quarter this year, the firm said.

Bottom line: Amazon is the "best long-term growth story available to investors today," Sanderson said.

And Amazon's share of retail sales across the U.S. in key categories - sporting goods, clothing, personal care and electronics - will only continue to accelerate from here, he said.

The latest hike in Amazon's share price is "becoming large enough to make an impact," Sanderson wrote. "This [trend] does not end well for traditional retailers and many will go the way of Borders and Circuit City, leaders in the first two large categories disrupted by Amazon.com."

Electronics retailer Circuit City filed for bankruptcy protection in 2008, with book store Borders following suit in 2011.

Amazon's stock, meanwhile, finally broke the much-anticipated $1,000 per-share mark in late May, beating Alphabet in an unofficial race between the two tech giants. Amazon shares have pared those gains since, closing Thursday at $965.14 piece.

A representative from Amazon did not immediately respond to CNBC's request for comment.

With an Amazon- Whole Foods deal in the making, pressure is about to hit traditional grocers head-on, as an internet giant takes on the "high-frequency" fresh foods market, MKM Partners added. "[P]ressures on traditional retailers will only get worse."

As of Thursday's close, Amazon's stock has gained 31 percent over the past 12 months, and shares are up about 29 percent in 2017.

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This chart shows how quickly Amazon is 'eating the retail world'

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One simple chart depicts what's taking place in retail today, as many traditional players that once boasted impressive revenue growth now report slipping sales. Amazon, essentially, is "eating the retail world," MKM Partners analyst Rob Sanderson wrote in a Friday note to clients.

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The Amazon Effect

Taking its name from the super fast-growing e-commerce giant, "the Amazon effect" is a phrase we use to describe the disruption caused when Amazon decides to enter into a new market and the havoc it can sometimes wreak on competitors.

That effect on brick-and-mortar retail stores is well documented. So, it comes as no surprise that many retailers are looking for ways to stay profitable.

While it has caused some retailers to permanently shutter many of their storefronts, US Census figures surprisingly show that physical retail stores still generate 90.7% of all retail sales. This raises the question: is "the Amazon effect" really an existential threat to physical retail?

Businesses still struggling to keep up may be wondering what they can do to encourage customers to come into their retail stores, instead of shopping from their internet-enabled devices. I think a good place to start would be to fight fire with fire and embrace technology as part of the in-store customer experience as well.

A unique and innovative experience

The convenience of online shopping is difficult to compete with, so many retailers opt for offering their customers a completely different experience than they could find online. A recent study by SOTI showed that 92% of customers prefer stores that offer a mobile technology experience, for example.

Augmented reality apps can allow customers to virtually try on clothes, see what a paint color would look like on their walls, or even how furniture would look in their homes. It is technological innovations like these that will bring the excitement back to shopping in a store. And with the right in-store technologies, retailers can get a better understanding of what their customers want out of the shopping process.

Using technology to track the movements of customers is another way to harness technology in a brick-and-mortar store. Analysing this data and using it to make valuable changes to aspects such as the store layout could go a long way to improving the customer experience, and in turn, boosting in-store sales.

Putting mobile technology at the heart of the logistics process is an option with Swisslog's CarryPick solution. Coupled with our SynQ software, there are even opportunities to share each step of order fulfillment with customers via a tracking page.

Use stores as warehouses

For omni-channel retailers, boosting sales in physical stores could be as simple as offering a fast and free click & collect option on the website. Delivery charges can be expensive, so providing a free option that brings customers into the store where they're more likely to make additional purchases could bring an increase in sales.

With warehouse space becoming more and more limited, omni-channel retailers also have the option of utilizing their stores as warehouses for their online customers. Customers who do choose the delivery option could benefit from faster dispatch from their local stores, but those choosing to click & collect get their goods faster as well.

Some of the latest technologies can even help retailers keep their stock up. Investing in an automatic palletizing solution like Swisslog's ACPaQ would get stock to stores quicker. Using innovative warehouse technology could mean higher stock availability in stores, and therefore an increase in click & collect orders.

More than just retail

A survey conducted by McKinsey showed that even in the most popular e-commerce categories, only around 10% of Chinese consumers stay online throughout the entire customer journey.

For example, customers for consumer electronics tend to visit a physical store to seek advice and get a chance to see the product first-hand before purchasing. This could be said for a number of other categories, including clothing - where people are more inclined to try before they buy.

Physical stores need to be more than just retail. Providing product demos, free advice, and try before you buy opportunities can position retailers as the experts in their field. Apple's Genius Bars, for example, offer customers the chance to talk to a tech expert about any issues they are having with their Apple product.

Offering these services in store could boost foot-traffic, and even if they don't make a purchase the first time they come in, they will gain a better awareness of what products are in stock for future purchases.

Automate your way to retail success

Contrary to popular belief, it is obvious that physical retail is not dead and, in fact, many retail stores are thriving again now that they have found their way through a few difficult years. There is more than one way to leverage technology and innovation to tackle the Amazon effect, and it differs depending on the type of business.

Swisslog has a comprehensive portfolio of solutions, from the modular SynQ software and intelligent CarryPick robots, to automated picking and palletising solutions like AutoPiQ and ACPaQ. There is an answer for every retail challenge, so don't scare away your customers by living in the past. Step into the future and show your customers the way.

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Should Retail Stores Tackle "the Amazon effect"? - Supply Chain 24/7

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Taking its name from the super fast-growing e-commerce giant, "the Amazon effect" is a phrase we use to describe the disruption caused when Amazon decides to enter into a new market and the havoc it can sometimes wreak on competitors. That effect on brick-and-mortar retail stores is well documented.

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The Amazon Effect on Physical Retailers: How Not to End Up Like Sears

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The Amazon Effect on Physical Retailers: How Not to End Up Like Sears

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As Jeff Bezos expands the Amazon.com empire, its dominance is impacting consumer behavior as well as legacy business models across more business sectors than we could have originally imagined. It's been referred to as the Amazon Effect.

One notable ripple of the Amazon Effect has been felt by traditional retailers. The profound impact has been twofold. The first lesson to be drawn from Amazon's spectacular success in transforming e-commerce is the imperative for these companies to accelerate their own e-commerce programs. If people buying even light bulbs online through Amazon Prime is not a wake-up call, then nothing will be. Secondly, traditional retailers must re-imagine their physical retail spaces in response to the changes in shopping behavior wrought by Amazon Prime and modern technology.

Evolution often happens slower than it should, but here the sense of urgency isn't overblown. Retailers can no longer drag their heels; otherwise they risk huge damage. As a cautionary tale, one need look no further than Sears, which ignored the Amazon Effect and has struggled mightily to get shoppers back.

For those that have seen the light, Kroger serves as great inspiration. The grocery chain has embraced the mission of creating personalized customer experiences to drive top-line growth. Kroger has created a data technology infrastructure integrating customer signals, including purchase history in an omnichannel context. By so doing, Kroger is copying the Amazon playbook by gleaning new insights to craft personalized offers.

To loosen the grip of the Amazon Prime stranglehold, traditional retailers have expanded to offer click-to-ship. Walmart now offers free two-day shipping for those spending at least $35. For those who prefer click-to-pickup, parking areas have been altered to make this service convenient and quick.

The artificial intelligence-driven ability for retailers to create these real-time, always-on consumer signal feedback loops has opened the door to sculpt more engaging and useful merchandising schemes at a ZIP code level. Rather than settling for the relatively impersonal one-size-fits-all approach, retailers now can tailor individual stores by making crucial decisions on layout, lighting and overall aesthetics according to their customer data. Now you could have two different Kroger locations two miles apart that feel like two distinct stores.

Retailers can also bring the latest in video technology to bear on store shelves by offering dynamic pricing and visuals to increase affinity. For example, the skincare section on the store shelf lights up triggered by consumers' mobile apps. This seamless journey is leagues beyond what has been previously passed off as innovation - receiving an offer on your phone but then getting frustrated because you can't find the item in-store, the result of ineffective merchandising.

And this is just the beginning. In early January, I attended the PSFK Future of Retail event and was genuinely impressed by some of the new innovations on display, namely Pinterest's p-commerce, HERO'S video chat for e-commerce shoppers, and Amazon voice technology.

Pinterest has proven itself as the leader in discovery shopping innovation. It touts a sophisticated personalization tool based on visual curation. In the first 100 years of retail, window shopping was a major trigger to get people into stores. Pinterest is developing an offering that has the chance to replicate that same human desire, but now on a fully personalized, yet scaled manner to bring the emotions of discovery and desire into shopping. This is more evidence that Pinterest, which has been quietly going about its business, is on the cusp of giving Amazon a run for its money.

HERO has built a very cool application for retailers to bridge their physical and online stores by repurposing in-store floor reps, with downtime, to video assist shoppers in the e-commerce realms (desktop or mobile) in real time. Stores are seeing amazing lifts in conversion due to the integration of this technology.

Voice technology is going to play a more important role in shopping and navigation in physical stores. Alexa is being piloted in the whiskey aisle right now in New York and Northern California liquor stores to help shoppers sort through a complex category currently exploding with choices.

Transformation in all industries is unavoidable in today's data-driven, technology-led world, but if a retailer can embrace change as a strategic imperative, it can actually enhance creativity, dedication and morale both within its corporate culture and, most importantly, with its customers.
Joe Lampertius is executive vice president, practice lead, shopper marketing at Momentum Worldwide, a global brand experience agency.

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Transformation in all industries is unavoidable in today's data-driven, technology-led world, but if a retailer can embrace change as a strategic imperative, it can actually enhance creativity, dedication and morale both within their corporate cultures and most importantly with their customers.

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Ways Amazon is Killing Traditional Retail

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Ways Amazon is Killing Traditional Retail

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Amazon's online sales have made the company one of the top ten largest retailers in the world.

In fact, the e-commerce giant has caused many unpleasant changes in the retail industry.

Brick-and-mortar stores are seeing their sales decline and losses mount up. Major department stores (J.C. Penny, Macy's and Sears) have had to close many of their stores due to declining sales.

However, Amazon's success is more than just lower prices.

In addition to selling many products at competitive prices, the tech giant also offers customers several valuable services.

In short, Amazon's competitive retail business model, creative services and innovative features have helped turn the retail industry upside down.

But, that's not news to anyone.

Amazon's business is more than just retail. Amazon is a technology company that offers many creative business lines.

For example, the company has developed popular new products like the Amazon Echo and the Fire TV Stick.

Also, the company is investing in drone technology research. Some believe that Amazon would like to use drones to make home deliveries to customers in the future. Few retailers are able to invest in new products like Amazon.

Well, there are a few but, ummm, are they really retailers? Maybe, we just need to shake our heads for a moment and think about it:

Tesla (yeaaah)

Facebook (probably not)

Apple (surely)

Google (I don't know Mr. Android)

Got off track dear reader, it's hard to keep focus in the swampy lands of the Amazon!

Both the website and mobile app are very user-friendly. This makes it easy to browse products and read reviews. Amazon is able to sell more products than most traditional retailers can because the company has built several large, high-tech warehouses think robots and the a.i. takeover.

Amazon has millions of merchants that are selling lots of products in many different categories, yes, we mean FBA, or, Fulfilled by Amazon.

Often, product categories have multiple sellers. This has created fierce competition-competition that drives down prices. Don't you love capitalism. Yes.

Most retailers just have a few vendors for a product category. Ooops. Bad strategy competitors. This means that there is not as much competition to lower prices-no good for consumers.

Amazon Prime (note: if you live on planet earth you can join Amazon prime by clicking that link) is another creative service offered to customers that decide to join.

Prime members are eligible for free shipping on all orders (excluding certain individual sellers); if you didn't already know this, it's time to wake up, or leave your cave.

Oh, and there's more.

Members can often get extra discounts as well. Imagine. Other retailers have started offering free shipping on more orders, which is a signal (like smoke signal yo) that the retail industry is having to follow Amazon's lead. Duh.

In addition to delivering packages via major carriers (USPS, UPS and FedEx), Amazon has developed a unique way to fulfill prime member orders. The company is creating on-demand, freelance jobs that make home deliveries to prime members-score one for the gig economy. This concept is similar to other gig jobs like Uber and Lyft.

Freelance workers can decide when they want to make deliveries. Currently, this delivery method is only available in select large cities, but the service continues to expand to new markets.

Amazon is in the early stages of testing out a store with no employees.

Robots will stock the merchandise.

Also, there are no clerks to check out customers. In fact, there is no check out at all.

Spooky.

Instead, all products will have RFID chips (please don't eat unless you robot) that will track sales.

Customers will be automagically charged for products once they take them out of the store. When this concept is successful, many jobs in the retail industry will be lost.

#SorryNotSorry

Companies that are unable to invest in this technology will likely go out of business. Maybe so, maybe not, let's wait and see.

Bye Bye

Amazon offers customers much more than just products to buy. The company has developed streaming services that deliver videos on demand. Customers can pay to stream movies on their devices. Also, prime members can stream digital music as well.

Amazon's digital streaming services complement its retail business because customers can easily shop while enjoying entertainment. Few other retailers can create a platform that offers both shopping and entertainment.

Back in the 2000s, Walmart tried to offer digital music to customers. However, the service wasn't profitable and ended up being discontinued.

Amazon has created tens of thousands of new jobs. Somebody must control the robots, right.

However, retail analysts (yawn) say that for every new job created by Amazon, multiple retail jobs are lost. I bet the analyst are right. This is because the company operates more efficiently than traditional brick-and-mortar stores.

Therefore, Amazon can do more with fewer workers - resulting in lower overhead costs - which puts pressure on other retailers. Thank you logic.

The company benefits from multiple streams of income from its different business lines.

All of its different subsidiaries, like Amazon Web Services, Prime Video, Amazon Echo, and more, are adding to the company's success.

Most retailers generate nearly all of their income from product sales to customers. This lack of diversification really hurts companies when their sales take a hit.

Do you shed tears when companies hurt?

When a company sees its sales drop, it will likely face cutbacks and have less money to invest in the future.

Imagine.

Amazon, however, can reinvest profits from each of its business lines in new products and services, which adds a financial cushion.

Now that sounds comfortable:

Finally, one of Amazon's greatest assets is having its headquarters in Seattle. Cough.

Bill Gates might be cool. Or, not.

This area offers the company some of the best and most innovative technology workers in the World. REALLY?

Mouth agape...

Few other locations offer as big of a high-tech workforce as the Pacific Northwest.

Having access to some of the most highly skilled workers in the world puts the company ahead of many competitors. Like Alibaba, just saying...maybe. What league are we talking about again?

Yes, other companies can recruit technology workers, but it's more challenging (and expensive) convincing recruits to move to a new place. That's likely arguable but we'll let it slide.

In short, Amazon is transforming the way consumers shop and interact with retailers.

This transformation is creating many, sometimes painful, changes for the retail industry. Poor baby got a booboo. How about an industrial strength hug.

Welcome to reality in 2017: Where have you been hiding out?

However, Amazon is more than an e-commerce site (double duh) that offers lower prices on products.

In addition to online retail, the company's business is also innovative. Isn't everyone's...on paper, well-in their minds. Kinda?

Give a dog a bone.

This innovation has resulted in many profitable ventures for Amazon. Bravo Amazon!

In fact, those other business lines create a diversified income (theres those different business lines again) that most retailers don't have (suckers, time to get with the program).

Amazon can use its multiple streams of income to grow and develop new business ventures in the future. This is getting repetitive. Adieu.

Isn't life Amazing?

More Amazon Blasphemy Thunder

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Ways Amazon is Killing Traditional Retail

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Amazon's has caused many unpleasant changes in the retail industry. Brick-and-mortar stores are seeing their sales decline and losses mount up. Major department stores have had to close many of their stores due to declining sales. See the ways that Amazon killing traditional retail.

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How Amazon Is Disrupting These 6 Sectors

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How Amazon Is Disrupting These 6 Sectors

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Few companies have a tangible or perceived impact on as many industries as Amazon (AMZN). From e-commerce to cloud computing to consumer products to media and entertainment, the $900 billion behemoth has its hands in practically every of the economy. Add to that the industries that Amazon has promised or been rumored to disrupt, and it takes an army of experts to fully assess the investment implications-opportunities or threats-to the companies in Amazon's way.

Eleven equity analysts from Bernstein recently came together to take a swing at it, each offering their perspective on the impact that Amazon has and could have on the sectors they cover. Together, the analysts have put out a combined 116 reports on Amazon across their sectors, the Bernstein team writes. Today's joint effort comes in at 61 pages.

"After transforming Enterprise IT & Retail (& sending further shock waves through its Whole Foods acquisition), Amazon has set its eye on Payments, Logistics, Pharmacy, Media & Consumer Brands (among other sectors) over the last few years," they wrote.

Here's how the analysts see Amazon shaking up each of the following sectors:

Payments: Amazon has made clear its desire to create a PayPal (PYPL) or Alipay competitor by "rebranding its product, launching stored balance capabilities, and reportedly adding discounts to attract small retailers," writes analyst Harshita Rawat. With Amazon already responsible for up to 3% of Visa 's (V) and Mastercard 's (MA) global payment volumes, a base of 2 million merchants and 100 million Prime subscribers, not to mention its 'formidable' tech prowess, Amazon could become a headache for PayPal in the long term. Visa and Mastercard appear more insulated since Amazon transactions are a small part of their sales and Amazon has shown its willingness to partner with Visa for its branded credit card.

Media: Included in Prime membership is access to Prime Video, a streaming video offering that includes licensed and originally produced movies, TV shows, and other video entertainment. Bernstein analyst Todd Juenger called Prime Video's impact on traditional TV providers and Hollywood studios "undeniably bad," accelerating cord-cutting and increasing the cost of acquiring creative talent and intellectual property. It's a positive for Netflix (NFLX), however: "Prime Video only hurts Netflix if you believe a meaningful number of consumers will look at their Internet TV options and conclude 'I don't need Netflix, I have Amazon Prime, I'm good,'" wrote Juenger. He sees Amazon increasingly pursuing sports streaming rights, making Prime membership increasingly compelling and sticky to subscribers.

Consumer Products: Analyst Ali Dibadj wrote that while Amazon has certainly increased competitive pricing pressure in the world of consumer packaged goods-which includes items such as packaged foods and beverages, toiletries, and diapers-big brands have held their own on the platform. Despite concerns that unlimited online 'shelf space' would remove large incumbent brands' protection from small challenger brands, "most shoppers still only purchase from listings on the first page where big brands dominate," according to Dibadj, thanks to their investment in sponsored listings and participation in Amazon programs such as Subscribe & Save and Dash. The bigger threat going forward will likely be from expanding private label offerings on Amazon.com , which currently have a lower penetration than in brick and mortar stores and may be supporting some of the current strong online performance by big brands.

IT Hardware: Amazon represents an "existential threat" to the traditional enterprise IT hardware industry, according to Bernstein's Toni Sacconaghi, as "IT organizations have begun to fundamentally change their thinking about tech spending, as companies increasingly eschew running their own datacenter hardware in favor of outsourcing most of this infrastructure to Amazon Web Services, Microsoft (MSFT) Azure, and Google (GOOGL) Cloud Platform." In a Bernstein survey from June, CIOs reported that on average 20% of their organizations' workloads were running in the cloud, a share that is only increasing. Amazon and other cloud providers have the scale and expertise to cut out traditional hardware players such as Dell, Oracle (ORCL), or Hewlett Packard Enterprise (HPE) through the use of whitebox hardware and in-house support teams. According to Sacconaghi, at its current penetration the cloud already represents at least a 4% headwind to traditional IT infrastructure spending growth, and will lead to negative growth as more organizations migrate functions to the cloud.

Health care: Analyst Lance Wilkes believes that Amazon is gearing up to enter the U.S. health care services industry through several channels in coming years. First, he sees Amazon developing an online pharmacy offering and reaching 12.5% share of the $300 billion market by 2027, at the expense of the likes of CVS Health (CVS) or Walgreens Boots Alliance (WBA). In June Amazon acquired PillPack, an online pharmacy startup that allows customers to manage their prescriptions online and order them for delivery. Second, Amazon's joint venture with JPMorgan (JPM) and Berkshire Hathaway (BRK.A) to provide health insurance for the companies' employees could provide insights that are expanded to other employer health plans, a space where Cigna (CI) and Aetna (AET) are most active. Lastly, Wilkes sees Amazon pursuing other health-care initiatives that align with its current businesses including "providing AWS services to health care companies, distribution of products to providers, Alexa as a health care concierge for individuals, and digital services include telemedicine." He noted that Amazon has made several health care hires in recent years.

Retail: Last but not least, there's the area where Amazon began. "By offering the 'long tail' of products that brick and mortar retailers can't provide in stores, Amazon was able to gain massive share in the growing online market and take share from inefficient brick and mortar offerings of broad assortments," wrote Bernstein's Brandon Fletcher. Traditional retailers have fought back in several ways, including by offering in-store assistance or services that can't be provided online, such as personalized selection or installation advice at retailers like Home Depot (HD) or Best Buy (BBY). With most of their stores in rural areas, retailers such as Dollar General (DG) or U.K.-based Tesco (TSCO.UK) can achieve more attractive economics in sparsely populated areas than Amazon's relatively expensive shipping and delivery to remote locations. Others such as Walmart (WMT) have been experimenting with online ordering followed by in-store pickup from its network of stores. Walmart and Home Depot have also shown willingness to use their established store networks as distribution centers for their own online offerings.

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How Amazon Is Disrupting These 6 Sectors

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Few companies have a tangible or perceived impact on as many industries as Amazon (AMZN). From e-commerce to cloud computing to consumer products to media and entertainment, the $900 billion behemoth has its hands in practically every of the economy.

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HOW AMAZON’S RETAIL REVOLUTION IS CHANGING THE WAY WE SHOP

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HOW AMAZON’S RETAIL REVOLUTION IS CHANGING THE WAY WE SHOP

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Yet despite having a hand in so many different industries, consumers largely trust Amazon with everything from their personal information and buying habits to the literal conversations they have in their own homes. According to a study The Verge conducted in partnership with consulting firm Reticle Research last year, Amazon is the most-liked and trusted technology brand by a wide margin. One likely explanation there is that the company has a strong relationship with its customers, thanks in part to its zealous commitment to low prices and a seemingly never-ending quest to make modern life more convenient.

Given that trust, Amazon has only escalated up its expansion into more industries and markets over the years, with that expansion accelerating since the introduction of the first Amazon Echo speaker with Alexa a little less than four years ago. To fully comprehend just how big the company has grown over the last 25 years, we've put together a guide on every major sector, product category, and market Amazon has entered into either by developing its own products or services, or by acquiring an existing provider with an established position.

Of course, it wouldn't be a comprehensive look back at Amazon without starting first with books - of the paper variety.

Print books

Ebooks, e-readers, and digital publishing

While Amazon grew in the '90s largely thanks to its growing share of the print book market and its dominance of online book sales, it was its early investments in ebooks and e-readers that turned it into a digital publishing and book-selling powerhouse. Amazon began work on its first Kindle e-reader starting in 2004 under codename Fiona, with its internal Lab126 hardware division leading the product development process. The first device was released in November of 2007 and sold for $399. Amazon has since released numerous iterations of the Kindle, and it now dominates the e-reader market after edging out competing products from Barnes & Noble, Kobo, and others.

Shortly after the first Kindle launched, Amazon premiered its Kindle Direct Publishing platform to let authors self-publish and sell books on Amazon. Two years later, the company launched its own suite of professional imprints called Amazon Publishing. Amazon now oversees tens of millions of self-published works on its platform and nearly two dozen imprints. In 2017, Amazon had more than 83 percent of all US ebook sales.

Amazon Prime, Prime Video, and original content

Amazon first entered the media industry as a major online retailer in the late '90s. The company began by selling CDs and DVDs to a burgeoning market of online shoppers who began turning to the internet for music and movies, before the technical feasibility of streaming and the advent of the iPod. But it wasn't until 2005, with the initial launch of Amazon Prime, that the company began laying the ground work for a future digital media ecosystem that integrated directly into its online store.

Amazon Prime Video has grown into a veritable Netflix competitor

Perhaps the most prominent Prime perk, however, is access to Amazon Prime Video. The video on-demand service started in 2006 as Amazon Unboxed, but was rebranded in 2008 and integrated into the Prime service three years later, where it became a huge selling point for Amazon's annual subscription. It now boasts thousands of free TV shows, films, and games, all accessible on pretty much every screen available.

Cloud computing

Bezos and those he's hired over the years have been prescient about a vast number of shifts in how people spend money, buy products, and use the internet. But none of their predictions may have panned out quite as lucratively as Amazon Web Services, the company's cloud computing division that loans server space and other computing resources at massive profit margins.

AWS started way back in 2000 as a way to help other retailers manage e-commerce operations, but it soon expanded into much more when key project members managed to convince Bezos that improving and evolving Amazon's own infrastructure may hold the key to a new business model. In 2006, the product as we know it today launched into public availability and proved to be a pioneer for the entire cloud computing industry, offering cloud storage, hosting, and a suite of other tools for managing entire digital infrastructures in remote data centers. The division now pulls in roughly $6 billion every quarter and continues to grow at breakneck pace. It earned $17.5 billion in revenue in all of 2017 and regularly outperforms the company's entire North American retail division in terms of profit.

Smart speakers and AI

The first Echo came out in late 2014 as a Prime member exclusive, but in the four short years since, Amazon has developed dozens of different smart home products that revolve around the speaker and voice assistant format. Today, thousands of products integrate with the company's Alexa platform to make use of its voice search and query capabilities. Just as it once foresaw e-commerce, streaming, and cloud computing as the future of the internet, Amazon saw AI as not just something that could live within the smartphone - as Apple established with Siri and Google with its Assistant - but also in the home.

The Echo line and its Alexa assistant are Amazon's avenues into our physical lives and our digital behaviors. With the data it collects, Amazon is able to better understand how we shop and how we want the devices of the future to listen, respond, and problem solve as if they were other human beings. Amazon has stiff competition in this space, primarily from Apple and Google, but its early investments in smart speakers and AI have helped Amazon overcome its absence in the key consumer markets like mobile, search, and social networks. As a result, Amazon has made early and tangible inroads in developing an ecosystem that customers will find increasingly hard to abandon down the line.

Twitch and live streaming

Amazon was never going to be able to compete with Google's YouTube in user-uploaded video content, and it didn't have the social infrastructure of Facebook to become a destination where people discuss their lives and share videos from around the web. But what Amazon did have was the resources to purchase a company that was poised to outrun both Facebook and YouTube to a new type of business: live-streaming, in particular video games live-streaming. The pioneer of that market was Twitch, which Amazon purchased in 2014 for just shy of $1 billion.

Twitch started in 2007 as a 24-hour live stream of co-founder Justin Kan's life (he coined the term "lifecasting") called Justin.tv, but it became very clear very quickly that live gaming content was more popular than pretty much anything else. In 2011, Twitch spun off gaming-centric channels as Twitch.tv, and it grew exponentially as online games and the technology to broadcast them live on the internet became more widespread and popular.

Amazon, seeing the obvious opportunity here, reportedly outbid none other than Google to become Twitch's parent company three years later, with the AWS infrastructure a big part of why Twitch CEO Emmett Shear decided to take the deal. Now, four years later, Twitch has outlasted both YouTube and Facebook's attempts to snatch away its market share and, given the popularity of titles like Epic Games' Fortnite, has become an even more integral fixture of modern online life and youth culture. Amazon has more recently integrated Twitch into its Prime subscription, giving subscribers free games and complementary channel subscriptions.

Groceries, household supplies, and ever-faster shipping

While Amazon was expanding into streaming video, hardware, and cloud computing, it simultaneously maintained an aggressive push into even faster shipping and all new retail formats. The company started its same-day shipping initiative, Prime Now, in New York City in 2014, and it's since expanded it to dozens of cities around the world. Around the same time, Amazon began a program called AmazonFresh to stock and ship groceries - including vegetables and refrigerated and freezer products - that it used as a way to stay competitive with traditional big-box retailers like Walmart and Target and Uber-like logistics newcomers like Instacart. The company now sells its own line of meal kits through Fresh to rival ready-to-cook options from companies like Blue Apron and Plated.

Amazon's move into offline retail has started a war with Walmart

Yet the more monumental retail push occurred last summer, when Amazon purchased grocery chain Whole Foods for $13.7 billion and proved, yet again, that Bezos is willing and able to buy his way into a new market when it's unfavorable to start from scratch. Amazon now uses Whole Foods' grocery pick-up and delivery perks and in-store discounts as a way to reward its Prime subscribers. It's also using its massive resources to lower Whole Foods prices, making it more competitive with Kroger, Target, and Walmart. In response, Walmart has begun investing heavily in e-commerce and grocery delivery to protect its turf from Amazon, setting the stage for an unprecedented retail war.

AmazonBasics and private label products

Amazon, with its unfettered access to troves of valuable consumer and seller data, came upon a rather interesting business model around 2009, when it launched a private label division under the name AmazonBasics. It started first with the items the company noticed people most often purchased without thinking too hard about the brand name, like batteries and HDMI cables. But as The New York Times reported this past summer, this proved to be a way to fast track a fledgling product category into a massive money-making top seller - AmazonBasics' AA batteries now outsell Duracell and Energizer on Amazon.com after just a few years.

Amazon now has more than 100 private label brands, some without the name Amazon even remotely attached, for product categories like clothing, dog food, and furniture. Yet AmazonBasics, and the Amazon Essentials clothing brand, remain the company's biggest weapons in its war against offline retail. Just as Walmart, Target, and other stores launched their own private label brands for virtually every product imaginable, the company has done the same. (In 2015, it also launched an official Etsy competitor in the form of Amazon Homemade.)

Smart home appliances

From there, the Echo line exploded. In the fall of 2017, Amazon launched an Alexa-powered alarm clock called the Echo Spot and a smart home hub in the form of the Echo Plus. Just last month, Amazon held another hardware event where it further amplified its assault on the traditional appliance industry and the smart home market simultaneously.

In one brief keynote, the company announced a car infotainment device, yet more updates to the standard Echo speaker and Dot line, a subwoofer, a set of stereo amplifiers, a Chromecast Audio competitor, a smart wall clock, a smart plug, and a super-powered Slingbox-style device for over-the-air programming. Oh and lest we forget, Amazon also made a microwave with Alexa built in, using it as a model to start competing with companies like KitchenAid, LG, and Samsung by making Alexa the go-to voice assistant and AI hub for household appliances. In addition to building its own devices, the company also invests in startups through its Alexa Fund to scout new and promising entrants and product categories, and it's acquired quite a few of those companies - including security cam startup Blink and smart doorbell maker Ring - to ensure it has every corner of the smart home covered.

Bookstores and experimental retail

Amazon's transformation into the world's more pervasive retail operation wouldn't be complete unless the company began a seemingly counterintuitive push from online to offline. Starting with its brick-and-mortar bookstores in 2015 - first in Seattle and now in Chicago and New York City - Amazon established its intent to compete on all fronts with its retail competitors.

In late 2016, the company launched its first experimental Go store, which replaces cashiers with a computer vision system that automatically detects when you take products off the shelf and checks you out as you leave the store. Go now has two locations in Chicago, three in Seattle, and one that just opened in San Francisco today, with more planned in California and New York City over the course of the next year. Bloomberg reported in September that Amazon may open as many as 3,000 Go locations by 2021, with the goal of competing with stores like CVS and 7-Eleven, as well as fast casual and made-to-go meal establishments. The company is also now experimenting with brick-and-mortar stores that sell only four-star rated products from Amazon.com, starting with a location in New York City.

Logistics, delivery drones, and warehouse robotics

Amazon would be nothing without its infrastructure. The physical and digital foundations of its business and the logistics operation to support it have allowed Amazon to grow faster than almost any other company in modern history, and in those areas you'll find the company's most forward-looking projects and costly endeavors.

Amazon is building a global logistics operation involving drones, planes, and freighters

But Amazon has been testing its drones for years and performed the first public demo delivery in the US last year. Meanwhile, it continues to submit outlandish patents about its vision for the future of drone delivery, including one for a self-destructing drone that disassembles itself in an emergency and a delivery drone mothership of sorts that would act as a city's central hub for package-carrying UAVs.

Although the company did raise the minimum wage for all of its employees earlier this month, it's plowing ahead on warehouse robotics and automation in a way that could fundamentally reshape how its lowest-paid employees perform work - and how many of those employees it needs to retain. Amazon now uses more than 100,000 robots in warehouses around the world to help move and organize products, according to The New York Times, and it also sponsors an annual robotics competition to help spur innovation in AI that could result in more dexterous and intelligent robots capable of performing complex physical tasks.

As it stands today, Amazon employs more than half a million people, more so than any other technology company in the country and second only to Walmart in the US. But the eventual result of its investments in robotics and AI is that technology's biggest and fast-growing workforce could see that growth start to slow and, perhaps years down the line, even shrink as robots tackle ever more complicated tasks. In the process, the company may develop robots for use outside its fulfillment centers. Amazon has already changed how we shop and, by extension, how we live our lives. Its next big step could be changing how we work.

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How Amazon's retail revolution is changing the way we shop

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In the course of a single generation, Amazon has grown from fledgling online bookseller to one of the most valuable and powerful corporations in modern history.