Amazon's recent $13.7 billion acquisition of Whole Foods has some industries fearful of what companies the mega internet retailer may take over next. Amazon.com, Inc. was founded by Jeff Bezos in Seattle, Washington in 1994 and has grown into the largest internet based retailer in the world. What started as an electronic commerce and cloud computer bookstore has grown to include the sale of music, DVD's, electronics, clothing, furniture, jewelry and just about anything you can think of. Amazon has proven the value of e-commerce, multiple distribution centers and fast and convenient deliver of what consumers desire at the click of a button.
Amazon's acquisition of the upscale grocer Whole Foods have many industries jumpy that they could be next. Whole Foods only has about 450 stores but fears have risen that Amazon will disrupt the grocery industry by creating distribution centers, online ordering and home delivery of fresh food. The purchase of Whole Foods has already caused fear in other American Grocery retailers and meal delivery services. In a world grown accustomed to the convenience of online browsing, ordering and delivering of just about anything we need, Amazon has a market on the market.
Here are 5 industries that Amazon may take over.
Home Improvement Stores
Big Box home improvement stores like Lowes and Home Depot have largely been unaffected by online retailers like Amazon, but there are new fears among these stores that they could be hit hard by the e-commerce giant. Brick and mortar stores haven't had much reason for concern because most customers working on home remodeling want to see before they buy. Appliance sales are also dependent on installation by the seller. However, Amazon is delving into the home improvement market. The e-retailer even made a deal with Sears to sell its Kenmore line of appliances online. This is cause for concern among home improvement stores like Lowes and Home Depot. Another market that Amazon has entered is automobile parts. The company now sells parts online.
Banks have not had cause for concern about e-commerce companies taking over their industry yet, but there have recently been fears and indications that this could happen. Rumor has it that Amazon could take over Capitol One and this has made the banking industry nervous. Amazon.com, Inc. does have a major market with third party commerce. Amazon Marketplace allows customers to purchase items from third parties through Amazon.com. Amazon offers loans to these small businesses to help them get started. These loans totaled $1 billion internationally last year. It's quite possible that Amazon will delve further into offering small business loans and that has the banking industry concerned. Amazon's online lending could also affect companies like PayPal and Lending Tree. Amazon also focuses on customer loyalty programs like Amazon Prime, and this loyalty could dissuade consumers from using other companies that focus on e-commerce.
Amazon Business was launched in 2015 as its business to business unit. The unit has sold equipment to business owners starting out including industrial supplies, everything from deep fryers to lab equipment. In just 2 years, Amazon Business is growing and this has other business to business suppliers concerned. Amazon Business has the potential to prosper in the industrial supply market which is already a highly fragmented industry.
Amazon's experience with online marketing and sales has some in the pharmaceutical industry concerned. With the high cost of pharmaceuticals, consumers of prescribed medications have long been searching for inexpensive ways to get the medication they need. Online pharmaceutical sales is a competitive market and online retailers of prescription medication are worried that Amazon could take over the market. In addition, Amazon's acquisition of Whole Foods have some drugstores like Walgreens and CVS concerned that the company will put drugstores within the Whole Foods brick and mortar locations.
Even those in the cloud industry are concerned that Amazon could take over the market. Amazon Web Service has already created hardware that speeds up software. Some companies established in the data networking industry like Google and Microsoft have cause for concern about the competition. Amazon Web Services is a tough competitor to businesses that focus on Slack like technologies used in corporate settings. Amazon Web Services may prove an attractive alternative to start up companies establishing their businesses through Apps.
Written by Garrett Parker
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