Amazon Keeps Shaking Things Up

Amazon’s latest foray into beauty retail underscores its over-arching mission of becoming Earth’s most consumer-centric company – and achieving dominance by disrupting all aspects of daily consumer life.

We’ve come to expect Amazon’s challenges that shake up sleepy and sometimes not-so-sleepy categories of products and services.  But too often the commentary is on the what and less about the why and where these attacks may lead.  Amazon rarely disappoints and recent news is no exception.  Salon services are in beta test in London and Amazon continues to challenge the all-too-mighty drug industry with their latest move to increase drug pricing transparency.

A (very) brief look at Amazon’s history of disrupting the accepted ways of doing things finds Hits, a few Misses and quite a few TBDs – but overall a winning record, especially in 2020 where their net sales growth of $106B was 11x Walmart’s $9B.  A few highlights looking at consumer-facing impacts:

Hits: (and we won’t even mention cloud computing or AWS)

• Prime – proved consumers were willing to pay for membership in return for privileges and perks with real value. Much as Walmart drove global supply chain improvements over the previous 20 years, Prime shook up customer fulfillment affecting titans of home delivery and helping launch multiple innovations and new businesses.
• Prime Video and Music – did the same and helped push streaming video into the mainstream, virtually killing off DVDs and players, then challenged the big movie studios and network television with original productions.
• Echo smart devices and Alexa voice assistant remain leaders and have crept into many homes and businesses today, galvanizing the growth of Amazon Music and Audible into formidable competitors vying for increasing share of the consumer’s daily attention.
• Fire – first it was readers, then fully functional tablets for streaming and most every other entertainment.
• Apparel – not only did the category and Amazon’s private label initiatives work, but Amazon is overtaking Walmart as the world’s largest apparel retailer.

Misses:

• Dash Buttons – not really that agile and easily replaced.
• Fire Phone – does anyone even remember this flop?

TBDs: this list includes a number of retail initiatives that may or may not eventually be highly successful or scalable, but the disruptive technologies and impacts on consumers are already validated:

• Go Technology – while Amazon Go and Amazon Fresh may or may not prove highly scalable, Go technology is. Whether licensed or copied, there is no question it is a major advance in speed and convenience beyond self-checkout and touchless payments.  Whether Amazon becomes a behemoth in grocery as a category, it has already proven there is much to be improved.
• Amazon One – palm signature based checkout is another speed and security option, and another likely winner in the same way as Go.
• Drugstores – following the acquisition of Pillpack came Amazon Pharmacy with home delivery (which the drugstore industry has largely shrugged off so far), but the latest move to add price transparency within Amazon Prime brings prescription price comparisons to consumers’ fingertips. They can quickly compare Amazon prescription prices to local pharmacies and decide where to buy and whether to use home delivery or store pickup.

This brings us to Amazon’s latest London salon format beta test with Amazon employees only.  New features include using QR codes to provide detailed product info and immediate ordering, and making tablets available (however, who doesn’t have their phone with them?), but the bigger change is the use of AR (augmented reality) to reduce the chance of buyer’s remorse.  Customers can virtually try on new cuts and color on a tablet before the scissors start to snip.  Will this be enough of a change to be scalable?  Who will pay for the service (consumers, stylists, salon owners)?  Will it prove a game changer?  Do enough customers face uncertainty in the chair, often enough, to make it a must-have service?  Time will tell, so put this in the TBD column.  But as Amazon has proven time and again, those TBDs usually have a kernel of something radical in there.

How can your business be disruptive?  It’s one thing to stay on the cutting edge, it’s another to help lead it.  Give us a call to learn how we help our clients win.