Amazon’s growing power in the U.S. economy
Amazon has a growing role in the U.S. economy that extends far beyond its retail business, according to a new report.
“Behind the packages on the doorstep, and behind the inviting interface and seamless service that has consistently put the company at the top of corporate reputation rankings, Amazon has quietly positioned itself at the center of a growing share of our daily activities and transactions , extending its tentacles across our economy, and with it, our lives,” says the report by the Institute for Local Self-Reliance.
According to ISLR:
Today, half of all U.S. households are subscribed to the membership program Amazon Prime, half of all online shopping searches start directly on Amazon, and Amazon captures nearly one in every two dollars that Americans spend online. Amazon sells more books, toys, and by next year, apparel and consumer electronics than any retailer online or off, and is investing heavily in its grocery business.
As a retailer, its market power now rivals or exceeds that of Walmart, and it stands only to grow: Within five years, one-fifth of the U.S.’s $3.6 trillion retail market will have shifted online, and Amazon is on track to capture two-thirds of that share.
Black Friday weekend was Amazon’s best-ever, according to the company.
Amazon device sales were up more than two times over last year and sales of Echo products increased sevenfold on Cyber Monday over last year.
In all, millions of Amazon-branded devices were sold this weekend, although the company doesn’t release specific numbers and did not respond to a request for comment.
Some 5.1 million Amazon Echo devices have been sold since its introduction in late 2014, according to analysis by Consumer Intelligence Research Partners (CIRP). The group surveyed Amazon customer and released its report just one week before Black Friday, when millions more devices were sold-through to consumers.
Echo is the flagship product – a Bluetooth speaker with a voice-controlled artificial intelligence named Alexa. Amazon Prime members can ask Alexa to control many smart home devices, retrieve information and play music. Of course, Alexa will also order from Amazon, although this is the least used feature.
“Our research shows that more than half of Echo owners use the device as more than a voice-controlled music speaker,” said Josh Lowitz, CIRP partner and co-founder, in a written report. “Users report asking about weather and news, and increasingly controlling other connected devices.”
In other words, they aren’t ordering products. CIRP estimates that most are largely using Echo’s voice-controlled features to play music, retrieve information (“Alexa, What’s the weather today?) or to control smart home devices such as lights.
But Amazon is doing everything it can to change this. Echo and the Amazon family of products, including Kindle readers, are designed to get Echo owners to buy more goods.
Amazon’s strategy has been to grow its Prime membership through exclusive offers and better pricing. The more consumers are drawn into the Amazon ecosystem, the more likely they are to exclusively use the company for pretty much everything they can.
Shoppers are already more likely to search Amazon for product information and reviews than even Google. Once they become accustomed to going first to Amazon, they cease to even compare prices, sometimes paying more for a product thanks to the convenience and perceived value of Prime.
It’s a genius move by Amazon founder and CEO Jeff Bezos, but chilling when you stop to think about just how much control that gives the company.
Walmart, though, is positioning itself for an epic battle with Amazon and its recent $3 billion purchase of Jet.com will help it better compete with Amazon’s marketplace and technology platforms while leveraging the a vast distribution network that includes more than 6,000 stores.
ILSR contends that Amazon’s growing dominance poses a threat to the economy through increased monopolization in industry and declining property tax revenue. There’s also the rise of low-paid jobs in Amazon warehouses and fewer small businesses that make for vibrant communities.
The ILSR report is more than 70 pages long and looks at Amazon increasing dominance as a cloud services provider and provider of various fulfillment solutions.
All of which serves to strengthen Amazon’s role in the economy.
the technocracy is alive and well..
“half of all U.S. households are subscribed to the membership program Amazon Prime, half of all online shopping searches start directly on Amazon, and Amazon captures nearly one in every two dollars that Americans spend online.”
“It’s a genius move by Amazon founder and CEO Jeff Bezos, but chilling when you stop to think about just how much control that gives the company.”
it is chilling..and thats just amazon..