Amazon has, in recent weeks, moved into healthcare, ventured further into logistics, and bolstered its in-home delivery service Amazon Key through the acquisition of video doorbell startup Ring. And so, as it continues to disrupt sectors outside of retail, we ask who – or what – could ultimately disrupt the disruptor?
Neil Stewart, chief executive officer, Salmon: Amazon’s capabilities across physical infrastructure, data, personalization and range make it difficult to beat.
That said, legislation could be a disruptor. This, of course, would be market-specific, but its increasing influence across media, product search, e-commerce sales and cloud sectors could lead to a market dominance review.
A mega merger of media assets, consumer data owner and logistics could compete – candidates could be Netflix, DHL and Walmart.
More likely, though, would be that Alibaba makes a commitment to the market that it will be a friend to brands and not compete like Amazon, thus gaining increased share and range of the brand catalog to sell to consumers.
Arthur Sadoun, chief executive officer, Publicis Groupe: What impresses me most are the traditional companies transforming to become stronger competitors to Amazon. This is why I am impressed by Walmart, and what Exxon Mobile is starting to do, more and more. It is like us – you have a long history, with values and people, and you decide that you want to still be relevant and competitive in the new world with new players. I admire a traditional company that is brave enough to bring the kind of transformation we need to be a real competitor to new platforms.
Paul Verna, principal analyst, eMarketer: Not only is Amazon an uncommonly diverse company, but each of its major business units – retail, devices, content, web services – is large enough to stand on its own among its top competitors in those spaces. To add to its market strength, Amazon is about to expand its advertising business and is working on futuristic technologies that could eventually translate to new revenue streams.
It’s hard to imagine a more diversified and future-proofed company, yet Amazon does face business risks. Like Apple under Steve Jobs, it is personality-driven, so its success depends in large part on whether Jeff Bezos makes the right decisions and steers clear of any blind spots he might have. And of course, anything that sidelines Bezos from his leadership role could have more of an impact at Amazon than a similar event at a firm that isn’t as closely identified with its chief executive.
Also, there are object lessons of companies that seemed invincible because of their diverse business portfolios, or the extent to which they dominated their industries: GE, AOL/Time Warner and the Weinstein Company are a few that come to mind. As hard as it is to envision Amazon slipping from its leadership, particularly in retail, unforeseen events such as a scandal or consumer backlash could instantly change the dynamics.
In short, I wouldn’t bet against Amazon, as it has so many leverage points in the businesses in which it operates, but no one can guarantee its continued success, either.
Jo Coombs, UK chief operating officer, Publicis Groupe: Amazon’s disruptor will be Amazon’s customers – at the end of the day it will be the consumer that decides enough is enough. And it will be for lots of different reasons. Either because they feel the brand has stretched its credibility too far, or because they revolt against the giant US brand, its ethics and the fact that it is closing small businesses in their thousands. Or because they realize they can get better quality cheaper elsewhere.
Amazon needs to build emotional engagement with the brand, rather than the structural and financial bonds it has now. It is useful but not entirely loved. Building emotional engagement helps to build trust. Amazon is probably only one or two breaches of trust away from customers voting with their thumbs and swiping away from the brand. We’ve seen it happen to Uber and Airbnb, and Amazon is not immune.
Right now I’m a fully paid-up Prime member, Amazon is my default retail search engine, and my children genuinely think Alexa has all the answers. But like many others, I have fears about the security of my data, and its approach to supporting talent who are working to deadline deliveries.
Ray Grady, president and chief customer officer, CloudCraze: Businesses need to take a long, hard look at their product offerings and ask themselves: “Are we fully leveraging our core capabilities? Are there areas where we’ve commoditized our goods/services where we could be overtaken by Amazon? If so, are there areas where we can better highlight the unique offerings that set us apart?” B2B brands should look at each function of their business and ensure each one is optimized to serve the customer.
Amazon’s agile mindset has allowed the company to infiltrate business market after business market. Because of this, B2B brands shouldn’t get too comfortable in their traditional ways of doing business. Smart B2B companies are learning from Amazon’s playbook and increasing competition across the board. The industry as a whole is transforming through investments in digital-first strategies to accommodate today’s business buyer, who wants the same convenient, flexible buying experience they get as a consumer.
Mark Bartlett, chief experience officer, FPX: As Amazon disrupts new verticals, businesses should look to capitalize in spaces it can’t touch. Amazon’s complete self-service process can fulfill basic orders, but isn’t optimized for complex products that require multiple touchpoints and configurations.
B2B organizations are best positioned to expose this weakness in Amazon’s customer experience. As Amazon encroaches into the B2B marketplace, organizations should look to build e-commerce solutions that address product and pricing complexity and allow customers to self-serve across channels. Organizations that do this quickly and efficiently will be able to beat Amazon at its own game.
Stephanie Trunzo, managing director, Globant: It would be a mistake for a business to try to replicate Amazon if it is aiming to be disruptive. Disruption will not come from imitation. Every business should work to be the best at its own game. That said, there are cultural characteristics that Amazon is applying to achieve its success that companies can apply to their own business models.
Amazon has a unique innovation strategy, enabling every part of the organization to learn and benefit from every other part – it calls it the ‘flywheel’. Putting collaboration at the center of its operations is a major reason why Amazon is able to expand in unexpected areas. Cross-pollination of disciplines and business units generates novel ideas. What leaders looking to transform their business are missing is the Amazon-like commitment to a company culture that thrives on and rewards change. Too many organizations today fear change when, in reality, they should embrace it as an opportunity to reassess and become more agile.
Companies will need to take this one step further and invite their clients, users and partners into the innovation process, creating a culture of change both internally and across their ecosystems. So, don’t disrupt Amazon by trying to become Amazon. Apply Amazon principles to disrupt your own business and your own industry.
This feature first appeared in The Drum's April issue, which talked about everything Amazon.