Thirty years after its inception, grasping the immense scale of Amazon is still a challenge
Take into account the extensive warehouse located in Dartford, which is situated on the outskirts of London. The company maintains a vast inventory of millions of items, with hundreds of thousands purchased daily.
According to the company, picking, packing, and shipping an item from the moment it is ordered takes approximately two hours.
Now, visualize that scene and multiply it by 175.
This is the quantity of “fulfillment centers” that Amazon maintains globally.
Even if you believe you can visualize the seemingly endless stream of shipments that traverse the globe, it is essential to remember that this is only a small portion of Amazon’s operations.
Amazon is a significant media and streaming company (Amazon Prime Video), a market leader in home camera systems (Ring), smart speakers (Alexa), and tablets and e-readers (Kindle), and a provider of hosting and support for vast swaths of the internet (Amazon Web Services).
Additionally, it offers a variety of other services.
“Amazon has been referred to as ‘The Everything Store’ for an extended period; however, I believe that it is more accurately described as ‘The Everything Company’ at this time,” Amanda Mull of Bloomberg informs me.
“It’s so large and omnipresent and touches so many different parts of life that after a while, people sort of take Amazon’s existence in all kinds of daily life sort of as a given,” according to her.
Or, as the organization itself once quipped, the sole method of surviving a day without contributing to Amazon’s profits was to “live in a cave.”
Therefore, Amazon’s narrative has been one of perpetual reinvention and explosive development since its inception by Jeff Bezos in 1994.
There has also been much criticism regarding the “severe” working conditions and the amount of tax it pays.
However, as it approaches its fourth decade, the primary question is: What is the next step after becoming The Everything Company?
Or, as Sucharita Kodali, a researcher at Forrester, describes it, “What is left?”
“Once you’re at half a trillion dollars in revenue, which they already are, how do you continue to grow at double digits year over year?”
One potential approach is to connect the dots between existing businesses. Amazon’s streaming service, which is increasingly reliant on advertisements for revenue, could benefit from the extensive purchasing data it has collected from its Prime members.
However, this is only a partial solution; what advantages can Kuiper, its satellite division, offer to Whole Foods, its supermarket chain?
Kodali suggests that the solution is to continue to attempt new business ventures and not be concerned if they fail to a certain extent.
A business robot line was terminated by Amazon this week after only nine months. According to Ms. Kodali, this is merely one of a “whole graveyard of bad ideas” that the company has attempted and abandoned to identify successful ones.
But, she adds, Amazon may also need to concentrate on another matter: the growing scrutiny of regulators, who ask challenging questions such as: What is Amazon doing with our data? What is its environmental impact, and is it simply too large?
“In the same manner that we rolled back the monopolies that became behemoths in the early 20th century,” Ms. Kodali asserts, all of these issues could prompt intervention.
Juozas Kaziukėnas, the proprietor of Marketplace Pulse, an e-commerce intelligence firm, is confronted with an additional challenge: the Western regions where his customers reside cannot accommodate substantial quantities of extra merchandise.
He informs the BBC that our cities were designed to accommodate only a few additional deliveries.
This underscores the significance of emergent economies such as Mexico, Brazil, and India. However, Mr. Kaziukėnas contends that Amazon is not only required to enter the market but also, to a certain extent, to succeed.
“It’s crazy and maybe should not be the case – but that’s a conversation for another day,” he said.
Amanda Mull identifies an additional objective for Amazon in the years ahead: to avoid competition from Chinese competitors such as Temu and Shein.
According to her, Amazon has “established the spending habits” of Western consumers by serving as a trusted intermediary between them and Chinese manufacturers. Additionally, it offers simple returns and lightning-fast delivery.
However, eliminating that final component of the agreement makes it possible to reduce prices, as has been demonstrated by Chinese retailers.
“They have stated that if you wait a week or ten days for something that you are purchasing on a whim, we can provide it for almost nothing,” explains Ms. Mull. This proposition is particularly alluring to many individuals, particularly during a time of financial hardship.
Juozas Kaziukėnas is uncertain, positing that the new retailers will remain “niche” and that it will require a significantly more fundamental event to challenge Amazon’s position.
“For as long as going shopping involves going to a search bar – Amazon has nailed that,” according to him.
Thirty years ago, a young company recognized the potential of the Internet to revolutionize the retail industry and a variety of other sectors.
Mr. Kaziukėnas asserts that a comparable flight of imagination, potentially involving artificial intelligence, will be required for that to occur once more.
“The only threat to Amazon is something that doesn’t look like Amazon,” according to him.
