4 Insights on The Future of Amazon

The Future of Amazon
Andrew Deen

Andrew Deen

Consultant
Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He is currently writing a book about scaling up business and his experience implementing lean methodology.
Andrew Deen

@AndrewDeen14

Consultant. Speaker. Writer. Discovering new stories in business, health, criminal justice & sports. Always look for an iced coffee in hand.
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It is no secret that Amazon is a giant of industry. Many industries, actually. From selling books to changing the way you read and listen to them.  To even creating new ways to run your house and enjoy your entertainment. Amazon really does have something for everyone.

As Amazon continues to diversify, it seems pretty clear that they are only going to grow in prominence in the years to come. Today we will be taking a look at five indicators that should give us a good idea of Amazon’s very promising future.

Building a 2nd HQ

One of the first indicators that Amazon is in for some big growth is that they seem to have outgrown the hometown that they started their business in.

Amazon’s first headquarters is centered in Seattle, and while that location will likely remain in full operation for as long as the company does, they have in fact grown so big that they are no bursting out of the seams of their place of origin.

The Seattle campus currently employs around 40,000 people. This second campus promises to create 50,000 new jobs for the community that hosts it. There are currently twenty cities vying for the chance to be Amazon’s new home. A list that has shrunk from the over two hundred potential candidates that competed for the opportunity last year.

The project would give the winning city the immediate benefit of 50,000 new jobs. Also around $5 billion in construction spending. However, not everyone is pleased with state governments competing to host a corporate giant.

Stacy Mitchell, chair of a non-profit organization that focuses on empowering local businesses had this to say.  “As these cities woo and grovel, they are basically communicating this idea that we should want Amazon to be bigger and more powerful in our economy.”

Criticisms or not, however, most communities on the list of twenty anxiously await the chance to host Amazon’s second headquarters.

Will Amazon Beat Out Walmart for Retail’s Future?

Everyone, of course, is aware of the retail giant Walmart. While Walmart is traditionally a place of in-person sales, and Amazon focuses mostly on online shopping, the two giants of retail are now crossing paths on the digital front as Walmart is beginning to work to expand their digital sales.

While the prevailing assumption is that Amazon will win this battle on its home turf, there are other factors to consider. For example, while Amazon does have a strong foothold in the online market, Walmart does have a lot more capital to throw around in order to gain on its competition.

Would losing ground to Walmart in online sales have a serious impact on Amazon’s future? Perhaps, but it certainly will not unseat Amazon as a retail giant.

Domination of the Grocery Industry

Here’s something you don’t really associate with Amazon: groceries. Or at least you didn’t use to, but now that Amazon has bought Whole Foods, you are probably going to start.

What’s the deal with this purchase? It seems strange at first, but there is actually a lot of logic behind it on Amazon’s part. For one thing, there is a pretty firm intersection of Amazon and Whole Foods customers (though when dealing with Amazon, that could be said of most things).

For another thing, the acquisition of Whole Foods gives Amazon the opportunity to cultivate data. P.K. Kannan, Professor of Marketing Science at the University of Maryland’s Online MBA program, wrote of this in an article on Media Post saying that with the purchase of Whole Foods, “Amazon will be able to collect data on these customers’ online and offline purchases to create a larger buying profile.”

While a larger buying profile can be helpful for a number of things. Kannan believes that it will be most beneficial in allowing “better recommendations from Amazon, coupons for either retailer and cross promotion.” Without question, the acquisition of Whole Foods looks like a great opportunity for Amazon going forward.

Using Automation to Collect Data & Dominate Markets

Finally, Amazon is really good at collecting data and using it to make future venture decisions. They get this data the same way that everyone else does: through surveys, social media, and other online analytics that reflect the state of the market.

Of course, Amazon is not alone in this strategy. All of the Goliath companies use big data to participate in market domination.

For more information about on how companies use big data to improve their business, click here.