Whether it likes to or not, Amazon sets the benchmark for retail, and tech innovation in general. It moves markets and can destroy billions in market cap with even a rumor that it’s moving into a new industry. That’s why all eyes are always on Amazon.
In the first six months of 2018, the company showed that if nothing else it’s not slowing down, if 121-percent Q1 profit growth is any indication. According to recent news from Ad Age, Amazon shelled out $3.4 billion on U.S. ads and promotions in 2017, earning it the No. 4 spot, up from No. 8 the year prior and No. 70 in 2010. That $3.4 billion represents a 28 percent increase over the prior-year period, and is more than Walmart, Ford and General Electric each spent on advertising, Ad Age said. Some of that promotional activity likely is going to Amazon’s more than 100 private-label brands, said to soon be worth as much as $25 billion and spanning categories from activewear in apparel to dog food, batteries and canned soup. Gotta make those 100 million Prime members feel like they’re getting the most out of their $119 annual membership, after all.
A company as large and innovative as Amazon needs a steady supply of fresh, seasoned tech talent. From where does it most frequently poach executives? Not Facebook, not Google—but Microsoft, its Washington-state neighbor. Sure, proximity is a likely factor; someone making the move from Microsoft’s Redmond headquarters to Amazon’s Seattle stomping ground doesn’t have to uproot home and hearth as would an executive leaving Silicon Valley tech firms behind. But, according to a CNBC article, there’s the prestige factor—like the popularity of Alexa versus Cortana—and Amazon’s higher salary and generous signing bonuses, reportedly as much as $100,000. From 2015 to 2017, a minimum of 30 executives at the director level or higher left Microsoft for Amazon. The next best talent source? Google, which saw five execs jump ship for the e-commerce giant over the same period.
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As Amazon grows in reach and influence, many shoppers can’t really distinguish whether they’re buying from Amazon directly or from its widely used marketplace of sellers from around the globe. That blurring of lines was likely a factor in Amazon’s decision to make some changes behind the scenes, merging the retail and marketplace teams. The move is yet another step toward honing the seamless customer experience that shoppers have come to expect.
With much of global retail’s innovation unfolding in China, it should come as little surprise that Amazon has some big ambitions in the world’s second largest economy—and largest digital commerce market. A CNBC report revealed that Amazon is seeking to hire a small business lending program manager in China, an effort that’s taken on renewed earnestness on the heels of Google’s $550 million investment in JD.com earlier this month. Loaning to merchants would be one way to encourage small business to join the e-commerce giant’s platform, reversing the trend in a market that Amazon has found “hard to crack.” Though retailers in the U.S. fear Amazon’s scale and deep pockets, it faces in China’s Alibaba a competitor whose value, resources and reach virtually mirror its own.
Prime Wardrobe, Amazon’s “try before you buy” apparel offering, emerged from beta earlier this month and now is available to all Prime Members. Which brands are most prominently featured on Prime Wardrobe? Athletic ones, according to a report from Barron’s. National brands Adidas and Puma as heavily represented on the service, as are private labels Peak Velocity and Core 10. Calvin Klein also has many items available, which could be an effect of its partnership with the online retailer. Given that Amazon needs to ensure a steady product supply, it shouldn’t be surprising that big brands get most of the spotlight here. Still, though, a quick look at the “top” brands shows little indication that the momentum in athleisure and the comfort-driven lifestyle will be slowing down anytime soon.
Imitation is the sincerest form of flattery, as the saying goes. While we don’t know exactly when it launched this project, rumor has it that Microsoft is developing cashierless store systems that rival Amazon Go in providing a seamless checkout experience. It joins a small group of innovators looking to rid stores of human beings tasked with swiping cards, bagging goods and making change, if they have their way.
Amazon wants its tentacles in everything, and that’s true of its payments offering, too. The company is said to be incentivizing small retailers to adopt Amazon Pay, which it argues consumers already trust and are comfortable using. Amazon also made it even easier for customers to obsess over their package’s journey, all the way to their doorstep, with new tracking features. However, it’s only available for orders delivered through Amazon couriers and not for packages carried by USPS, UPS or FedEx. And for the ultimate convenience—or potential grand theft auto—another service enables Amazon to deliver packages right to your vehicle’s trunk.
Amazon’s investments in fashion appear to be paying off with consumers, who increasingly buy more apparel on the e-commerce site and even describe it as “fashionable.” That’s troubling news for everyone who continues to mock the Amazon platform’s lack of aesthetic appeal, even as the retailer eats their lunch.
Remember when Amazon acquired Body Labs? It appears to be finally putting that startup to good use, inviting volunteers to come into New York City biweekly to be body scanned. Amazon is said to be interested in how the physique fluctuates over finite periods of time. Maybe that will help it design better-fitting clothes that can accommodate the odd bit of water weight?
Sometimes Amazon makes the headline for all the wrong reasons, like destroying perfectly good reusable and returned products and earning the No. 1 spot on the “Dirty Dozen” list of unsafe employers in the aftermath of a spate of preventable, fatal workplace accidents.
Up next?
Some industry insiders believe Amazon could mark its birthday, July 5, by announcing the winning location for HQ2, among the biggest storylines in tech and one that’s launched a thousand thinkpieces. So far, the Washington, D.C. metro area—also known as the DMV—seems to be a leading contender, with its highly educated populace, proximity to top-tier universities and excellent public transportation. Amazon plans to hire 50,000 initially, with an average salary of $100,000, and occupy 500,000 square feet, which it plans to expand to as much as 8 million square feet over the following 17 years.