In recent years Amazon has been the frontrunner is retail sales in the US and arguably around the world. The effects that Amazon is having can be felt on a global scale. Recently, Amazon has surpassed Walmart, the second largest retail store, in their value and continues to grow at an alarming rate. Here we will talk about what the Amazon effect actually is and how businesses and individuals can deal with the outcomes.
The Amazon Effect
The Amazon effect gets its name from the disruption and slow decline of brick and mortar stores due to Amazon’s model of almost entirely eCommerce shopping. Amazon has only recently infiltrated the brick and mortar style of business but their main focus, and what they are well-known for is their easily accessible eCommerce store. The Amazon effect can take many forms. By studying the retail market you can see the slow decline of brick and mortar stores and even a shift in focus from those stores that are still open. Brick and mortar stores are gearing their focus towards a unique and desirable customer experience that you would not be able to get on an eCommerce site like Amazon. Stores promoting and encouraging shoppers to come in to stores can be a direct link to the Amazon effect.
The impact of Amazon and the eCommerce shopping trend they have created is taking a toll on jobs as well. Many large retail clothing stores have laid off thousands of workers due to the lack of shoppers in store and the trend seems like it is going to continue in the following years. Amazon recently acquired Whole Foods, a grocery store and has stepped into a more lucrative business competing with large competitors like Walmart and Aldi.
Amazon has offered small businesses a chance to take part in their eCommerce dominance. Small business owners can now operate through Amazon as another revenue channel and sell their products through ads that Amazon sells and help them operate after store hours. The potential for Amazon is arguably limitless. There are plenty of benefits that can be identified through Amazon and there are also other negative side effects of the Amazon effect when looking at retail through a traditional lens.