It’s only a matter of time until Amazon comes for your business.
At least that’s the impression the online retail giant is leaving as it announces a series of new ventures that simultaneously stretch the company beyond its original big box origins while also supporting its underlying mission to reach every shopper, everywhere, as quickly as possible.
First, there was Amazon’s announcement in October of the launch of “Handmade at Amazon,” which specifically focused on artisanal goods and was a not-so-subtle dig at start-up competitor Etsy. Though the two services aren’t identical, Amazon clearly viewed the marketplace for handmade goods as robust enough to throw its weight behind, and is betting on the company’s superior shipping and tracking operations for a market win. As our chief of research Dave Donars noted in our weekly podcast, Amazon has far more sophisticated inventory tracking systems than Etsy, but what it lacks is market share—Etsy serves more than 1 million designers, makers and artists, while “Handmade” launches with only 5000.
More recently, Amazon has stepped into the growing market of “on-demand” services, tapping into consumers’ increasing desire for instant gratification and hands-free interactions. First the company launched its “Dash buttons,” which allowed consumers to simply press a brand-specific gizmo and see that product magically added to their Amazon shopping cart. Taking that concept to another level, Amazon released a promotional video earlier this month that showcased its prototype drone delivery service, promising a total time of 30 minutes from placing an order to drone drop-off in the backyard. This comes on the heels of an earlier announcement from Google, which plans to use slightly different technology to similar ends.
Amazon isn’t simply making investments in markets to scare off competitors. Instead, it is making targeted and incremental moves towards both expanding its capabilities while enhancing the fundamentals of its business: a wide product range, a user-friendly shopping experience, and a speedy and well-organized shipping experience.
That doesn’t mean the company is infallible, or that all these bets will pay off. For one, airspace regulations in the United States might delay or even derail drone delivery plans, while loyal craftspeople might choose to stick with Etsy, particularly if the company can paint itself as the underdog against the Amazon juggernaut. But that won’t stop Amazon from pursuing a multi-prong strategy to move into adjacent markets and improve, expand and enhance the shopping experience for its customers.
Is Amazon coming for your business? If you sell a product or provide an on-demand service in a marketplace that Amazon hasn’t touched yet, watch out. For example, this spring the company announced they would launch a line of Amazon-branded food and cleaning products and earlier this month said that Amazon Prime customers could now order restaurant delivery meals in certain cities across the country.
