For Amazon, e-retail is just the tip of the iceberg
This month marks 20 years since Amazon sold its first book. It began as an online bookstore and then went on to sell and do so much more, helping to transform e-commerce in the process. But its influence goes well beyond selling online: it also changed expectations for shipping, and even impacts how we get online.
Amazon played a major role in making something common that was unthinkable two decades ago – fast, free shipping.
“That they can get all these different types of items in all these different quantities shipped all over the country in two days is amazing,” says Constance Helfat, professor of technology and strategy at Dartmouth’s Tuck School of Business.
Amazon accomplished that by opening lots of distribution centers and investing in data and tech. Killer logistics made it fast. Being big helped it drive a hard bargain with shippers.
“What this has done for UPS and FedEx in particular, I think it has probably made them up their game,” Helfat says.
The company also quietly became a mega-player in a totally different field through a venture called Amazon Web Services. Most people have never heard of it, but anyone who goes online experiences it, because it sells the very backbone of the internet.
“Amazon Web Services is the leading infrastructure provider on the Internet,” says Wharton School professor Kartik Hosanagar. “There were many companies that were actually direct competitors of Amazon that said, ‘let’s just use Amazon for our back-end infrastructure.’”
A multibillion dollar business running cloud computing server farms doesn’t sound much like something an online retailer does. But AWS is straight out of the Amazon playbook: get big, get good and sell cheap.
“We think of Amazon as a retailer, but really it’s this incredibly opportunistic and flexible technology company that’s in a lot of different businesses,” says Brad Stone, author of “The Everything Store,” the best-selling history of Amazon.
Those businesses include streaming movies, devices — and even drones.
Like any good 20-year-old, Amazon threw itself a huge birthday party Wednesday in the form of Prime Day, a sales event exclusive to Prime subscribers that purported to be “bigger than Black Friday.” Amazon released some sales numbers that at least partially back-up this claim, but some reviews weren’t so kind.
“A lot of the discounts look like they fell off a truck headed to a poorly regulated flea market,” Gizmodo wrote, and users took to Twitter with #PrimeDayFails.
Prime Day also had stiff competition from Wal-Mart, who tried to crash the party with its own sale promising to undercut all of Amazon’s deals. So who had the best to offer?
TVs
Amazon Prime members could get a 50-inch, 3D, HD Samsung smart TV for $999 — at least until the deal ran out early in the day. Wal-Mart had another Samsung TV with a slightly bigger and curved 4K screen for $1,297.99, or about $600 off.
They’re both tricked out, and about a third less than list price. Amazon throws in an external hard drive with a bunch of HD movies and its offering seems slightly more practical.
Advantage: Amazon
Toilet paper
No contest. Wal-Mart will happily sell you 18 mega rolls of Charmin Ultra Strong TP for $16.98. Prime users can get a box of 24 for $47.95, almost double the price per (mega) roll.
Advantage: Wal-Mart
Computers and tablets
Amazon had a few killer deals, like more than half off this Lenovo convertible laptop and great deals on its own devices. But what if you don’t want a Kindle? Wal-Mart had a much wider variety of brands at discount, so you were more likely to find the exact thing you were looking for.
Advantage: Wal-Mart
“Lord of the Rings” Blu-Ray box sets
For some reason, Amazon completely dominated this (very) particular category, offering all three “Lord of the Rings” movies (extended versions, natch) on Blu-Ray for $27.99, or 77 percent off list price. Even after the deal expired, Amazon’s price was still quite a bit cheaper than Wal-Mart’s $85 offer.
Advantage: Amazon
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