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The Demon Tattler

Amazon Turns Retail Upside Down

Indira Tho-Biaz Wilder, Author

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Amazon’s success is disrupting retail all over the country. Countless companies’ sales are down because of Amazon’s explosion in ecommerce, or online shopping.

Their tactic? Takeover.

Amazon now owns Whole Foods Market, which is a huge company buying out another huge company. Amazon’s success is dramatiucally reducing Barnes & Nobles, Macy’s and other retailers’ profits. According to Prosper Insights & Analytics, in a January 2017 survey of more than 7,500 U.S. adults, “More than three-quarters (76.7%) of Macy’s core shoppers headed to Amazon.com during the fourth quarter of 2016.”

The demand for Amazon’s products and the company’s popularity was shown in 2017 when Business Insider reported that “[When] Amazon’s site went down for 49 minutes the company missed sales of nearly $5.7 million.” It also stated, “Amazon’s unique users are 5x more valuable than eBay’s. Amazon’s average unique user brings in about $189 while eBay’s brings in just $39.”

An unintentional slogan known to many other businesses is “The Amazon Effect,” defined as “the ongoing evolution and disruption of the retail market, both online and in physical outlets, resulting from increased e-commerce,” according to Tech Target.

H&M is even at risk. Market Watch, a media company that offers financial information and analysis, reports that H & M lost 40 percent of its market value in the last two years, and the effect is growing: “H&M certainly isn’t the only retailer to feel the pain of the customer move to e-commerce. The shift is happening fast in apparel.”

In 2018, Amazon was labeled the World’s Largest Online Shopping Retailer, according to CNNMoney. According to Statista, Amazon’s sales in 2017 were more than $177 billion. According to Forbes, Jeff Bezos has a net worth of more than $130 billion.

Some of Amazon’s success is from the subsidiaries Amazon owns, which number more than 40, a few being Zappos, Whole Foods Market, and Audible. In addition is the mass expansion of Amazon expanding to Flipkart as they battle with Walmart. Amazon also has over 100 million Prime members.

Amazon is even going after Netflix, making Prime movies and TV shows that are original. Netflix has been making Netflix Original series and movies since 2007, butt Amazon has only been making its own content since 2010.

Although Amazon is successful in the amount of income they bring in, the company did lose some of its momentum because of a mistake. When the company refined its privacy policy, it removed from its database any people who did not agree to their privacy policy, and their accounts were erased. This affected some Prime account holders who were advertising or promoting, using the site as their host. Amazon’s revenue dropped by 5 percent at that time.

But no one predicts a reduction in revenue for Amazon in the long term. According to Statista, by 2022, they will be bringing in more than $356 billion a year, and the Amazon Effect will continue.

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Amazon Turns Retail Upside Down