The next five years of Amazon
For two decades, Amazon has grown like wildfire, eschewing profit, pouring all its revenue back into itself, and leaving a wake of destruction in retail. Now it's going in for the kill.
Amazon has launched more than 100 private-label products, by market research firm Gartner L2's count. “That’s going to be a major part of what we think of as the future of retail," says Donald Ngwe, a professor of business administration at Harvard Business School.
- The massive amounts of data Amazon has on its consumers give it unparalleled insights into what shoppers really want, says James Thomson, a former Amazon executive who now advises brands that sell on the platform.
- By selling more of its own products, Amazon is competing against the sellers on its own marketplace — and starting to catch the attention of regulators and anti-trust lawyers.
Physical stores: At the beginning of 2018, Amazon made waves with its announcement of "Go" — a cashierless convenience store. By the end of the year, it had opened six of them across the country, with plans for as many as 3,000 more by 2021.
- Add those to Amazon's bookstores — 18 and counting — and "4-star" stores, where it sells goods that earned over 4 stars on its site.
- Tack on the more than 450 Whole Foods stores that Amazon also owns plus its reported plans to open even more of them.
- All told, the e-commerce giant is well on its way to establishing a brick-and-mortar presence in every major city in the country.
Amazon responded to this story:
“There is an important difference between horizontal breadth and vertical depth. We operate in a diverse range of businesses, from retail and entertainment to consumer electronics and technology services, and we have intense and well-established competition in each of these areas. Retail is our largest business and we represent less than 1% of global retail and around 4% of U.S. retail. In addition, Amazon’s private label products are less than 1% of our total sales. This is far less than other retailers, many of whom have private label products that represent 25% or more of their sales.”— An Amazon spokesperson
Note: This story was updated on January 14 with a quote from an Amazon spokesperson.
Special report: The future of retail