IMPACT FELT IN TRANSFORMED BY Frequency of Shopping: Non-Prime v Prime Members DIFFERENT SECTORS AMAZON’S FOCUS ON CAUSING AMPLIFIED BY Your margin is my opportunity Beautifully, wonderfully dissatisfied B2C CPG Total household spending Brand-owner implications Whole Foods Takeover Electronics & Auto Fashion Moving beyond selling “the Earth’s Biggest Selection”, Amazon is a leader in consumer-facing Daily 2x or more a week There are many ways to center a business. You can be competitor focused, you can be Traditional retail and eCommerce is the growth driver for CPG in Amazon is less concerned with a product or Companies can support Amazon by $13.7bn takeover of multichannel grocery Amazon’s share of the US Computer & U.S. apparel sales climbed 3% in 2017 while AI voice assistants and enterprise cloud services. Its insatiable appetite for new markets product focused, you can be technology focused, you can be business model focused, and eCommerce competition the next 5 years with 9 out of 10 dollars of brand being category leader so long as it is a focusing on total contribution dollars. retail with over 470 stores. Cut prices on Electronics category has declined from 28% Amazon's apparel sales grew 25%. Most 6% retail growth in 2016 being online. sales leader. It is not worried about margins Maximise profitable sales by boosting high volume stables by up to 43%, installed in 2016 to 25.5% despite 60% of customers recently, Amazon announced Prime means competitors must always be on guard against its next moves. As it transforms digital 15% 16% there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 Walmart 31% The Power of Prime Structural change happens when a for individual items. It looks from a volume, concentrate on profitable items Amazon lockers and introduced Prime claiming to have purchased in last year. But Wardrobe, its take on a clothing subscription JD.com and remember that prices will be tested commerce it is not leaving retail behind. Amazon’s Q1’18 financial results reported $4.26b from vitality. Why? There are many advantages to a customer-centric approach, but here’s the big Amazon’s most important product is not a product category goes >20% online, grocery perspective of total household spending. savings and in-store benefits. A new the introduction of “Try now, buy later” 30 service. This disruption is complemented by Flipkart by Amazon’s dynamic pricing algorithm. “Physical Stores” – grocery, book and convenience stores across the US – that make the one: customers are always beautifully, wonderfully dissatisfied, even when they report being but a membership. Prime’s ability to funnel new probably won’t but transformation is being This can be a problem for CPG companies eciency-first ideology means a “culture day trials of electronics over £400 is set to the Echo Look which uses machine learning “destroyer of physical retail” a bigger name in bricks-and-mortar than Sears and JCPenny. happy and business is great. Even when they don’t yet know it, customers want something ideas to >100m loyal members drives growth and Otto Group driven by: who don’t generally operate on those terms. clash”, greater centralization and lay-os. disrupt the market again. In the UK Amazon to act as a “hands-free camera and style Amazon Prime subscribers spend $1,300 per year Better Prices is also the 2nd largest supplier of car parts. assistant” to suggest outfits and better, and your desire to delight customers will drive you to invent on their behalf. innovation. 25% of consumers in UK, Germany, Tesco Mobile Commerce Non-Prime spend $700 per year Spain, Italy, 15% France. Amazon’s first forays into On-Demand & Subscription Omnichannel Opportunities crowdsourced fashion advice. scalable grocery delivery via AmazonFresh & New Retail Experiences Stronger Health Assortment AmazonPantry are only available to Prime members Targeting Margins as its hyperlocal 1-2 hr delivery service Prime Now. More Prime Benefits AmazonBasics oers simple consumer Own Brand Leverage Unprecedented growth “Amazon is not a monolithic operation, electronics and accessories. Targeting BEHAVING LIKE Last Mile Delivery Boost After diculties recruiting fashion brands As the 2nd company to reach a $1trn market value, Amazon peripherals that stores and brands made but rather a collection of businesses because of its inability to follow pricing is expected to grow at 16% average compound growth in Avoiding Day 2 FUELLING Competitive Transformation THAT large margins on reinforced low-cost sales through 2025. It accounts for 49% of the US UNITES standards & image concerns, Amazon turned 4.19bn sharing resources, including a channel “Day 2 is stasis. Followed by irrelevance. Amazon describes the environment for its products NEW COMPETITION Brands Competing leadership but also created a better starting eCommerce market and 5% of all retail spend which is to own brands. It is now predicted to be the Followed by excruciating, painful decline. and services as ‘intensely competitive’ and seeks NEW BRAND SELLERS OFTEN USING MADE WORSE BY point for all consumer electronics purchases. predicted to be 10% by 2020. Its strength is in developed Prime Day Sales $ (Amazon.com), logistics, and a common Marketplace Sellers Fulfillment by Amazon with(in) Marketplace largest US seller of apparel in 2018. Followed by death. And that is why it is to change every category it enters. It views its main B2B2C The China Crisis markets with 41% internet commerce share in Germany, BRANDS PARTNER 2.41bn technological foundation.” Ben Thompson always Day 1.” current and potential competitors as: Marketplace competition Amazon opened up a fixed price Marketplace FBA stores sellers’ products in Amazon's Marketers must decide whether to wholesale Competition is fierce at the bottom of the 27% in UK and 20% in Japan. India is an APAC priority due 1.52bn Search eBay in 2004. 3rd-party sellers gain access to fulfillment centers, pick, pack, ship, and directly with Amazon or allow other enterprises to sales funnel - the likes of Samsung or to Amazon’s relative weakness and 1% share in China. True Customer Obsession Online, Oine, & Multichannel Retailers Amazon's customer base, and Amazon provide customer service for these sell their goods, too. Brand Security and Control Unilever are not competing with their 1P Model for Brands 0.9bn Amazon aims to be the start of the path to purchase Alibaba Resist Proxies: Process, Surveys Publishers, Vendors & Distributors expands the oerings on its site without products. It’s estimated that 60% of top are significant challenges within Marketplace. usual foes but 3 week product lifecyle Under Armour’s partnership with Amazon is for all shopping purposes. Already in the US & UK Rakuten Embrace External Trends Brand/Product Manufacturers more than 50% of product searches start on Amazon. having to invest in additional inventory. sellers on Marketplace use FBA to o-load Brands can now ensure that sellers use correct pseudo-brands from China. They can get premised on the “1P” model. “The 1P model is 2015 2016 2017 2018 SUPPORTED The Everything Store Its domain strength, recommendation engine, data inventory to Amazon because it is hard to visual assets but agile sellers can out maneuver a smart watch lookalike turned around in where you have a relationship with Amazon BY High-Velocity Decision Making Media Publishers & Distributors Increased Sales (+53% of units sold) Amazon has separate retail websites for US, UK and IE, France, Canada, compete on price while handling fulfilment big firms: even Nike finally agreed to be a seller to 5 days and using self-serve ad platforms and Amazon is wholesaling with you and Web Search Engines collection and personalisation make the search Profit Cut and Sells B2B Services Sellers quitting Germany, Italy, Spain, the Netherlands, Australia, Brazil, Japan, China, India process expansive and ecient. plus customers with Prime get to have get Amazon to police 3rd party sales. Brands with agile automation can outspend selling your products…Having the 1P model Three Pillars Amazon Prime and Mexico. They provide the entry point to not only Amazon’s oerings INVESTING IN Comparison Shopping Websites Data for Own Retail Business two-day shipping. need to leverage: Unilever x100 at the bottom of the funnel. Amazon’s Seller Forums are a monument helps you establish the new protocol in how Bezos said that Amazon rests on three Oers membership eCommerce including but those of +5m Marketplace sellers. Social Networks & Web Portals “Policing” Power Over Brands Access & Partners to frustration: the top two posts are “Bye you do business on Amazon, how your brand Everyone!” and “I’m leaving too.” The vast shows up.” pillars, of the new pillars in development free one day delivery bundled with exclusive Prime Video Food & Grocery Stable customer needs eCommerce Service Providers THAT Long-term, Detail Thinking he says to “ask him in 10 years”. digital media products. “We want Prime to GENERATES majority of the conversation is about USING “What’s not going to change in the next 10 Seller’s Annual Revenue be such a good value, you’d be irresponsible Amazon Music Beauty & Health Advertising MOMENTUM Digital Content Customer Obsession challenges with the relationship between Amazon Prime years?...you can build a business around the things Enablement Ecosystem Bangladesh click farms not to be a member” Appstore for Android Toys, Kids & Baby Customer Service Providers Media creation and $10m+ $6-10m Distinctive Emotional Propositions Amazon and its third party sellers. Segmented Commerce Amazon Marketplace that are stable in time...when you know something HARNESSED BY distribution competition A network of third party service has grown $2-6m for product popularity Levi’s drives sales by understanding the Echo & Alexa Clothing, Shoes & Jewelry is true, even over the long term, you can aord to Payment Processing Higher fees = Lower Profitability Amazon Web Services Apple up to support and profit from sellers.