Amazon Next Targets
When it comes to e-commerce, there’s no doubt that Amazon is king – at least for now. They are so big, so influential, that what they do impacts the entire market. More than this, people follow Jeff Bezos’ company because they have continued to make successful moves into new areas, identifying new opportunities and new markets, and even creating some of these markets themselves.
Everyone is watching them, trying to predict their next move, partly in an effort to see where the market is going and how individual businesses can either compete, take advantage of Amazon’s moves, or learn from them.
We’ll look at some likely upcoming developments for the e-commerce giant, and by extension, for the market itself.
It’s not Amazon vs Walmart
Although that’s what everyone is talking about.
Retail guru Deborah Weinswig, writing for Forbes, has a fascinating take on Amazon’s real competitor especially in the apparel space. It’s actually Target, she notes, where Amazon sees its true adversary.
Walmart still leads with the most shoppers when it comes to clothing and footwear sales in the US. But second place? It’s neck and neck between Amazon and Target for the coveted number 2 spot. Her surveys found that most Amazon shoppers in this segment had switched from Target, and that the shopper overlap between Amazon and Target is immense (when Amazon shoppers were asked where else they buy clothing and footwear, more of them named Target, more than other department stores or off-price retailers, including Walmart). Also interesting was that Target apparel shoppers are more likely than others to have an Amazon Prime membership, suggesting even more overlap.
So is Target a competitor, or a potential acquisition? We’ve seen Amazon shell out the big bucks for bold moves (like Whole Foods). Target themselves will be anxiously looking back over their shoulder, with this category comprising 20% of their sales and an aggressive strategy that saw the launch of more in-house brands, and with the traditional retail sector really struggling to keep up in the face of the ascendancy of e-commerce companies like Amazon.
It may sound like every headline writer’s dream; but do Amazon have Target in their sights?
The Smart Money is Looking at Pharmaceuticals
Amazon muscled into the $800 billion US grocery market with their Whole Foods acquisition. Pharmaceuticals, a $450 billion industry, has a lot in common with the grocery market and many are pointing in this direction when discussing Amazon’s next move.
The synergies are obvious. A combination of online and brick-and-mortar convenience and distribution, great cross-purchasing with Amazon staples such as toiletries or beauty products, and a complex distribution chain that Amazon would love to cut.
Chains such as CVS and Walgreens Boots Alliance have already seen stock prices under pressure as the rumor mill spins. Bloomberg notes 6 likely ways Amazon will take over this space, 4 of which we agree with:
Predictions that have been thrown around as potential targets include Premier, Express Scripts, Glooko (a subscription-based diabetes management platform), GoodRX, and Pillpack (an online pharmacy start-up that delivers prescriptions by mail in personalized packets, based on when the user needs to take them).
Another bold move that has been mentioned is partnering with a someone like Berkshire Hathaway. Already Amazon, Berkshire Hathaway and JPMorgan Chase & Co. have announced that they are partnering on ways to address healthcare for their US employees, with the stated goal “to improve US employee satisfaction while reducing overall costs”.
Some see this as a segue into the pharmaceutical business for Amazon, even though initially it will take the form of an “independent company that is free from profit-making incentives and constraints”. What is certain however is that with an alliance like these 3 companies, others in the industry will be quivering in their boots.
When it comes to Amazon and the pharmaceutical industry, Bloomberg said it straight: “The pharmacy market is one of the biggest potential new targets for Amazon.com Inc.”
Amazon, meanwhile, has never commented on its pharmacy ambitions.
Amazon is that big that their decisions impact the global market. They have moved e-commerce forward so much, that if you don’t have access to up-to-date information, granular statistics and reliable insights, you’re dead in the water. At Market Beyond, we can give you this access, complete with real-time, product-level, actionable insights to give you an unfair advantage over competitors, and put you in the perfect place to take advantage of the next big thing in e-commerce.
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