What is the Amazon Effect? ​​Amazon Effect Review

Impact

Analysts from all walks of life are studying the impact of the "Amazon effect" on their industries: banking, commercial real estate, express delivery, etc. The "Amazon effect" is not limited to the United States. The huge changes in business forms caused by this technological innovation are a global trend.

The Amazon Effect

1. In June 2017, Amazon announced that it would spend $13.7 billion to acquire Whole Foods Market, the largest natural and organic food chain retailer in the United States. The stock prices of other food retailers fell immediately. Especially after Amazon announced that the acquisition was about to be completed and the maximum price reduction of some popular products was as high as 43%, the market value of the six major food retailers in the United States evaporated by nearly $12 billion in one day.

2. In August 2017, retail giant Walmart and Internet giant Google announced that they would cooperate to launch voice shopping services to fight against their common enemy Amazon. However, Amazon's market share continues to rise. During the Christmas season, more than 6,000 trailers and 32 Amazon planes were busy delivering orders in the United States.

Sears announced that its home appliance brand Kenmore will be connected to Amazon's voice assistant Alexa and will be sold on Amazon.com. As soon as the news came out, Sears' stock price, which had almost collapsed, rose sharply by 24% at one point, but the increase narrowed to 10.6% at the close of the market. Other home appliance and home product retail stocks (such as Home Depot, Best Buy, Whirlpool, etc.) fell sharply...

3. After the news that Amazon might enter the pharmaceutical industry came out, the stock prices of American pharmaceutical retail giants such as CVS and Walgreens plummeted. The fear of Amazon, an "outsider", directly prompted CVS to announce in early December 2017 that it would spend $69 billion to acquire the century-old health insurance company Aetna. The New York Times commented that if the deal is approved, it will "reshape the American medical industry."

4. On Prime Day 2017, some online shoppers noticed a new service called "Hire a Realtor" on Amazon's homepage. Screenshots of the service quickly spread throughout the trade circle, and the stock price of potential competitor Zillow fell 3.5%.

A day later, the page disappeared quietly, and the entire real estate industry breathed a sigh of relief. The National Association of Realtors explained that Amazon did not have the right to use the trademarked word "realtor" - only then did Zillow's stock rebound. This farce seems exaggerated

Influence

The first level of impact is on business forms

The second level of impact is on social forms

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First, Amazon came back from the tech bubble and disrupted the entire retail industry.

Secondly, Amazon's huge success in hardware and AWS (cloud computing business) has made technology giants feel inferior, laying the foundation for the widespread influence of the "Amazon effect."

Amazon's Impact on New Retail

1. Use a physical store to support your online store

While physical stores still have their uses, many companies are rethinking that use. The end result is a new era of retail stores, such as Amazon Go, a checkout-free convenience store that completely skips the traditional cashier checkout process by using technologies such as computer vision, deep learning, and sensor fusion. Customers only need to download the app, scan the code to enter the mall, and they can shop, and the Amazon account can be automatically checked out and charged. This grab-and-go shopping experience has undoubtedly brought huge impacts to the retail industry.

2. Track customer behavior in your store

Everyone knows that you can use analytics to improve your sales strategy, and data analytics for e-commerce is now becoming more effective for brick-and-mortar stores as well. The data analytics behind candy retailer Lollipops have made a huge impact because they analyze data by tracking the paths customers take after entering the store, and these unique insights have paid off. For example, the company found that one branch was not achieving high sales compared to other stores, and after checking the in-store analytics, they found that there was a table that was preventing customers from going to buy candy. These analytics also helped them better train their employees to engage with customers, including offering free samples. Using this technology, Lollipops has almost completely abandoned its marketing budget and relies almost entirely on customer service.

3. Leverage existing mobile technology

A recent study by SOTI, a provider of enterprise mobility management solutions, found that: 92% of shoppers prefer stores that offer a mobile experience; 73% want mPos to reduce checkout time; 65% want location-aware coupons; 61% choose to use self-service instead of talking to a sales assistant; and 47% want personalized service. By understanding the different approaches, online and physical stores can work together to accommodate increasingly independent shoppers. When consumers enter a store, they already know what they want, and the opportunity for retailers is to provide a mobile experience that makes it as easy as possible for them to purchase products.

References

• 1. "Amazon Effect" Impacts American Business Community_Reference News Official Website: NetEase News [cited on 2011-11-28T16:00:00.000Z]
• 2. What does the Amazon effect mean for new retail: Baidu [cited on 2018-02-23T16:00:00.000Z]
• 3. Amazon becomes inflation killer? The "Amazon effect" may affect economic recovery: Geek Park [cited on 2018-06-25T16:00:00.000Z]