Following the recent announcement that Amazon had acquired Whole Foods for $13.7 billion dollars in cash, it’s clear that this online retailer is spreading its empire. Now the third biggest retailer in the world, experts predict that Amazon will take the number two spot by next year, second only to Walmart.
It was only a few years ago that many of these same experts thought that Amazon was never going to succeed. Now, everyone is worried. Currently there are over 2 million sellers in their digital marketplace, making way for “a future where the number of actual brick and mortar stores will diminish,” said retail expert David Ian Gray at our Breakfast Event last month.
According to Gray, Amazon’s success is based of a simple, two concept model: “One: sell everything. Two: sell everything at the best price with super convenient service.”
An Amazon warehouse. (source)
One of the ways they’re growing at such a rapid pace is by diversifying, made evident by the Whole Foods acquisition. However, they’re also pushing forward into fashion by selling private labels, providing a marketplace for other brands to sell, and even acquiring other online retailers.
One of the most recent ventures that disrupts retail even further is the Amazon Wardrobe Service. All a customer has to do is pick three or more items, whether it be shoes, clothing, or accessories. Then they have 7 days to try them on at home and decide what they want to keep. Anything you don’t want you can just drop off at your local UPS location or schedule a free pick-up.
To incentivize keeping their purchases, the company is offers an extra 10% off when you hold on to three items, and 20% off if you keep five or more. This new form of e-tail could have a detrimental affect on malls and brick-and-mortars, as it makes the shopping experience easy, fast, and cost effective for the consumer; three elements they can’t compete with.
How long do you think it will take before Amazon takes the top spot as the biggest retailer in the world? Tweet @naiopvancouver and let us know your predictions!