created 2 years ago

For years, retailers have been haunted by the thought of Amazon using its technological prowess to squeeze them into powder. That battle has mostly played out on Amazon’s home turf, the world of online shopping.
If those experiments work — and there is no guarantee of that — they could have a profound influence on how other stores operate. Over time, they could also introduce new forms of automation, putting traditional retail jobs in jeopardy. At the same time, locating those stores close to customers’ homes could also help Amazon further its ambitions of delivering internet orders within hours.
The company is exploring the idea of creating stores to sell furniture and home appliances, like refrigerators — the kinds of products that shoppers are reluctant to buy over the internet sight unseen
These would not be your average Home Depots: Amazon has considered using forms of augmented or virtual reality to allow people to see how couches, stoves and credenzas will look in their homes,
Amazon is also kicking around an electronics-store concept similar to Apple’s retail emporiums, according to two of the people familiar with the discussions. These shops would have a heavy emphasis on Amazon devices and services such as the company’s Echo smart home speaker and Prime Video streaming service.
And in groceries — a giant category in which Amazon has struggled — the company has opened a convenience store that does not need cashiers, and it is close to opening two stores where drivers can quickly pick up groceries without leaving their cars, all in Seattle. It has explored another grocery store concept that could serve walk-in customers and act as a hub for home deliveries.
Overseas, Amazon is quietly targeting India for new brick-and-mortar grocery stores. It is a vast market, and one still largely dominated by traditional street bazaars where shoppers must wander from stall to stall haggling over prices and deliberating over unrefrigerated meat sitting in the dusty open air. Amazon’s internal code name for its India grocery ambitions: Project Everest.
Last week, Amazon opened its fifth physical book store in Chicago, and it has five more announced locations under construction.
It is possible that some of the store ideas will never see the light of day.
“We are always thinking about new ways to serve customers, but thinking is different than planning,”
One big desire many customers have is that they want to see fresh fruits, vegetables and meat in person before buying them. The relatively high cost of home delivery — Amazon charges $15 a month for its Fresh service, on top of a $99 annual Prime membership — is another barrier.
Online grocery delivery accounts for only about 3 percent of the market in the United States, though it is closer to 10 percent in Britain
Joe Thompson, a former general manager in Amazon’s retail business, sees physical retail as key to Mr. Bezos’s outsize ambitions for the company. "I can’t help but feel that, in Bezos’s mind, he wants to be the first trillion-dollar valuation company,” said Mr. Thompson, who is now an executive at BuildDirect, an online home improvement store. To do that, he said, Amazon would have to “crack” a couple of “completely underpenetrated markets online.”
Amazon’s current market value is bobbing around $400 billion.
A growing number of established grocery retailers are experimenting with this “click and collect” approach to shopping, including Walmart, Kroger and others.
the company has been developing technology for automatically detecting when a customer pulls into the parking lot so orders can be brought to them more quickly.
A few miles away from its other Seattle stores, on the ground floor of one of its many office towers in the city, the company is testing Amazon Go, a convenience store concept stocked with beverages, sandwiches and prepared meals, which are put together by chefs in a kitchen that is visible from the street.
“Amazon is wonderful at frictionless commerce,”
“I’ve probably been in 30 boardrooms of retailers in the past year,” Mr. Galloway said. “I would say the No. 1 topic of conversation is Amazon.”
India could represent another big market for Amazon in physical retail. The company, which has vowed to spend billions of dollars on its efforts in the world’s second-most populous country, recently sought approval from the Indian government to open online and physical food stores in the country, The Economic Times reported in February.
“What appears to be clear is they haven’t yet zeroed in on a format they’re willing to massively scale,” he said. “This is a company that the moment it figures out something that works, it puts nuclear energy behind it.”
Amazon has become the leader in the e-book market on the strength of its Kindle line of e-readers. And it dominates an important segment of the cloud computing market; Amazon Web Services is expected to generate $12 billion in revenue this year.
“There's an opportunity to do innovation in big companies,” says author and startup guru Eric Ries. “But very few big companies have done this really well. Amazon is one of them.”
But so far, Google has had little to show for these efforts. Google Glass was a flop. The company has developed some impressive self-driving technology over the past six years but has still not turned it into a commercial product. Google bought Nest in 2014, but the company has struggled to expand beyond smart thermostats. Google acquired some robotics startups in 2014, but hasn’t figured out what to do with them and wound up putting one up for sale.
Google’s most promising “moonshot” is its self-driving car project, which is widely regarded as the technology leader. But top engineers on the project have grown impatient with the company’s slow pace in getting to market. A team of Google engineers left Google to found Otto, a self-driving truck company acquired by Uber earlier this year. The leader of Google’s self-driving car project, Chris Urmson, recently quit to create a self-driving car startup of his own.
“I know examples where a random Amazon engineer mentions ‘Hey I read about an idea in a blog post, we should do that,’” Eric Ries says. “The next thing he knows, the engineer is being asked to pitch it to the executive committee. Jeff Bezos decides on the spot.”
At a normal company, when the CEO endorses an idea, it becomes a focus for the whole company, which is a recipe for wasting a lot of resources on ideas that don’t pan out. In contrast, Amazon creates a small team to experiment with the idea and find out if it’s viable. Bezos famously instituted the “two-pizza team” rule, which says that teams should be small enough to be fed with two pizzas.
“They prioritize launching early over everything else,”
Of course, this method isn’t foolproof; Amazon has had plenty of failures, like its disastrous foray into the smartphone market. But by getting a product into the hands of paying customers as quickly as possible and taking their feedback seriously, Amazon avoids wasting years working on products that don’t serve the needs of real customers.
“It doesn't matter what technology” teams use at Amazon, one of the company’s former engineers wrote in 2011. Bezos has explicitly discouraged the kind of standardization you see at companies like Google and Apple, encouraging teams to operate independently using whatever technology makes the most sense.
One way to deal with the conundrum is for big tech companies to acquire startups early in their growth. That allows a startup’s innovations to be combined with the resources of a big company. Uber acquired the self-driving truck startup Otto less than a year after it was founded. GM paid a billion dollars for the self-driving car startup Cruise in March.
Basically, Mahaney forecasts Amazon's retail business will continue to grow 20% year-over-year on average, while the AWS cloud business will grow at a 40% annual clip for the next five years. In its most recent quarter, Amazon's retail grew a little over 25% year-over-year. AWS grew 55% year-over-year.
Then, put a 10% margin on the retail side, and a 40% margin on AWS, and you would get to roughly $82 in earnings per share, he said. If you give a "modest" 25X P/E multiple on that, Amazon's stock will hit $2,000, which would equate to a $1 trillion market cap.
The man, who wasn’t identified by authorities, sent an e-mail visible to hundreds of co-workers, including Chief Executive Officer Jeff Bezos, before the incident occurred, according to a person familiar with the matter. The man survived the fall from Amazon’s 12-story Apollo building at about 8:45 a.m. local time Monday and was taken to a Seattle hospital, police said.
In the e-mail, the man expressed criticism of how the company handled his transfer request, and he hinted that he might harm himself, according to the person.
The online retailer has taken steps to soften its image as a difficult employer since a New York Times story last year portrayed the company as a bruising workplace where employees were encouraged to take advantage of one another to get ahead. Amazon disputed the characterization of the company.
The company surveyed 2,000 customers in the U.S. over Labor Day weekend, and found that 55 percent of them said that they begin their product searches at Amazon, up from 44 percent in 2015. That's a 25 percent swing in just a year.
The numbers were pretty close on mobile, though Google does have a better standing: 50 percent saying they go to Amazon first, while 34 percent said they use search engines. Again, only 16 percent go straight to the retailer sites.
A full 90 percent of respondents said they will go to Amazon, even if they want to the retailer first, to see if they can get a better price. Of those who do this, 78 percent said they do it "often or always."
Only a third said that Amazon had better personalization and recommendations than retailers, and over 40 percent said they'd go a retailer if they improved their personalization (note to retailers: improve your personalization!)
Watch out, Shutterfly. Amazon has quietly launched a new service called Amazon Prints, which allows consumers to print photos and custom photo books, and soon, other photo products like stationery and calendars, at prices that are significantly cheaper than rivals.
The news of the launch caused Shutterfly’s stock to take a big nose-dive, Bloomberg reported. With shares dropping 12 percent to close at $44.20 on Wednesday, it clocked in as the worst single-day decline for Shutterfly stock since February 2008.
Investors’ concerns about Amazon’s entry into this space may be valid. Amazon appears to be using Prints as something of a loss-leader to move customers to its online storage service – and course, Amazon has the server capacity to handle an influx of new customers, too, thanks to its cloud computing business, AWS.
For example, Shutterfly charges $0.15 for a 4×5 print, while Amazon charges just $0.09. Meanwhile, 5×7 prints are $0.99 on Shutterfly, but only $0.58 on Amazon. The larger 8×10 prints are $3.99 on Shutterfly, and $1.79 on Amazon Prints.
In addition, Amazon offers affordably priced photo books that start at $19.99. Customers can choose between hardcover-bound books with glossy paper, or Premium Layflat hardcovers with matte paper.
However, to use Amazon Prints, there’s a slight catch. Unlike on other services, where you can simply upload files from your computer or via a native mobile application, Amazon Prints requires that you use Amazon Drive. That makes Prints more of an advantage for Amazon Prime subscribers, as one of the benefits of Prime membership is unlimited, free photo storage.
“We need to get better at helping — almost by hand, write what some of those decision flows are to get people the right information,” he said. “With the Olympics, it’s so broad and so huge, you can’t really do that, so that taught us a lot about how the UX should be moving forward.”
Refinery29’s Flash Briefing offering is an audio version of its morning news roundup, which is published in a native iOS app and on its website. The challenge for the site’s staffers is to figure out how to to convert something written to be read into something delivered audibly. To create the Alexa version, Refinery29 added an extra field in its CMS; the editors creating the post tweak the writing to create the Alexa version of it.
“There’s no opportunity to click out, there’s no opportunity to get some clarification through an image. It really is: How do you take 25 words and make them a wholly enclosed story?”
I'm very excited to introduce Amazon One, a Boeing 767-300 that is our first ever Amazon branded plane which will serve customers by adding capacity to support one and two day package delivery in the US. Adding capacity for Prime members by developing a dedicated air cargo network ensures there is enough available capacity to provide customers with great selection, low prices and incredible shipping speeds for years to come. Over the next couple of years, we’ll roll out 40 planes just like this one.
Amazon is making its largest investment yet through its Alexa Fund into internet-connected thermostat-maker Ecobee.
The $100 million Alexa Fund is named after Amazon’s intelligent voice service, Alexa, that powers devices like Amazon Echo, a $180 smart speaker. The fund is designed to encourage developers to work on new services and integrations on the service. To date, Amazon has mostly invested in hardware companies like Ecobee. The investments have typically been small.
Ecobee first integrated with Alexa in February through an API Amazon calls Alexa Connected Home Skills. Using the Amazon Echo device, users can control their thermostats by issuing commands like “Alexa, turn the heat to 74.” Amazon Echo has become an increasingly become an important platform for smart home devices. Recently, Amazon has been ramping up its efforts to encourage hardware startups to integrate Alexa directly into their products, according to companies in the market.
Founded in 2007, Ecobee is the second largest seller of Internet-connected thermostats in the US, with 24% share of the market, according to research firm NPD Group – second only behind Alphabet ’s Nest. In 2014, the $250 Ecobee3 came out with strong reviews that compared it favorably to Nest’s thermostat. The biggest differentiator of the Ecobee thermostat was with the temperature sensors that users place around their home. The thermostat will adjust the temperature based on readings from those sensors. Meanwhile, the Nest thermostat is only able to take temperature readings from the immediate area surrounding the device, not in locations away from the thermostat.
Ecobee’s main competitor, Nest, has been struggling lately. After Google GOOGL -0.39% acquired the hardware startup for $3.2 billion in early 2014, problems started surfacing. Nest’s smoke detector was recalled following software problems that would accidentally turn off an alarm based on user movement. It acquired smart camera maker Dropcam for $555 million, but the integration of the two companies did not go smoothly. In June, Nest cofounder and CEO Tony Fadell left the company. Nest’s problems have likely opened up plenty of opportunities for Ecobee.
In addition to being early on the Amazon Alexa platform, Ecobee was the first thermostat to work on Apple's AAPL +0.25% smart home platform, HomeKit. HomeKit is the iPhone maker’s program for syncing up smart home gadgets in iOS and using its voice-based intelligent personal assistant, Siri.
If you want a book, you have to check Amazon for the most current price. If it's cheaper on the website, it's cheaper in the store. And if something is on sale on the website, it's on sale in the store, too! Neat.
When my colleague Aly Weisman visited Amazon Books late last year, she found that approach to be kind of lame, since it meant having your phone out always. Personally, though, I think it's awesome!
So Amazon Books is the best of both worlds. I get that experience of browsing the shelves, which, as a card-carrying nerd, I love a lot. But I also know I'm getting what is almost definitely the best price possible, thanks to Amazon.
And if you use your Amazon account at checkout, the cashier will even thank you for being an Amazon Prime member. It's all very Amazon-y.
The quotes on the bags are taken from passages frequently highlighted by Kindle readers, like this one from Veronica Roth's "Divergent."
My final word on Amazon Books, really, is that I hope they open one up in San Francisco sooner rather than later. It may not be able to completely replace the traditional bookstore, but much like Amazon itself, it's just so convenient.

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