Amazon is stepping up its Fresh delivery service to include brick-and-mortar convenience stores and drive-through grocery shopping. Amazon isn’t commenting directly about this project, but the Wall Street Journal and other new sources are reporting that Amazon is set to open a brick-and-mortar convenience grocery store in Seattle. If all goes well,the model could extend to other cities. This is another example of Amazon exploring new consumer delivery options. At times, it seems they are throwing everything on a wall and seeing what will stick while consumers foot the bill for the company’s experiments. It is a brilliant business strategy.
Back in 2007, Amazon started Amazon Fresh. For the membership price of $299 a year, customers could order perishable goods like produce and have it delivered. The service hasn’t really taken off, but rather than abandon it entirely, Amazon seems to have doubled down. Now the company is placing its bets on a brick-and-mortar store that offers quick pickup of items. Since the grocery industry relies on warehouses, refrigeration and other overhead costs, efficient delivery is difficult, as is the need to maintain an irregular inventory of goods. This could be why Amazon is turning to traditional brick-and-mortar locations and adjusting its pricing strategy. But, it is doubtful that Amazon’s foray into non-virtual convenience stores is a permanent business model. Instead of a bet, it is more like a well-funded stepping stone.
Instead of offering Amazon Fresh for $299 a year, Amazon Prime customers can add Amazon Fresh to their membership for $15 per month. These recurring payments can help Amazon keep its grocery arm flush while it explores the best way to deliver goods. With the future of drone delivery hitting obstacles, Amazon can maintain a presence in the grocery delivery business through drive-through convenience stores and brick-and-mortar locations. This presence might only be temporary. Once drone delivery and other supply chain issues are resolved, Amazon might return to what it does best, efficient online ordering and fulfillment without ever once dropping from consumer consciousness.
Channel Retailer, a company which helps firms sell their goods online is reporting that year over year sales are decreasing substantially on Amazon. A small increase in January has been followed by consecutive months of a decrease in the year over year sales growth. In July the year over year sales growth was a mere 6.4% growth at Amazon. This is in stark contrast to an increase of 30.1% in July of 2015.
So what explains the decline in year over year sales growth month after month for retailers selling through Amazon? The primary factor driving this decrease in growth is the greater amount of competition many companies now face when selling there. Amazon has seen a great number of third party sellers now competing with established firms.
The greater competition cuts into the market share of the companies already there. This explains the decrease in year over year sales growth. Increased competition also leads to lower prices. When a new competitor arrives they may lower their price in order to gain customers. This leads to existing companies having to lower their price in order to remain competitive.
Greater competition and lower prices is what is driving the sales growth down on Amazon for many companies. The flip side to this is that consumers like me and you can benefit from the lower prices by buying goods at cheaper prices. The goods could also be higher quality as companies compete more heavily for customers.
EBay too is seeing a sharp increase in competition in online sales. However, when you take Amazon and eBay out of the equation, year over year sales growth for many companies is actually quite strong with a percent in the amount of 50% growth. If you are looking for good deals online eBay and Amazon may be your best bet right now.
Amazon is making inroads into various different areas of new media. Video game companies seem to be good investments for Amazon. The retail giant enjoys buying up these ventures. Recently, Amazon made the decision to purchase even another gaming company. The new one is purported to be “Skype for gaming”.
Amazon owns Twitch, a video game streaming entity. Twitch, in turn, has purchased Curse Inc., a company known for its eSports endeavors. Curse Inc. has had a major success story in the form of Curse Voice. As the name suggests, Curse Voice allows gamers to conserve with one another during game play.
“League of Legends” is a game that tremendously benefits from Curse Voice. The company behind “League of Legends”, Riot Games, even infused $30 million into Curse Voice to make sure it succeeds. The acquisition of Curse Voice by an Amazon entity definitely shows Curse Voice is going to be around for some time. Amazon absolutely has the resources to maximize the success potential of Curse Voice and various other entities that come under the ownership of the corporate giant.
Amazon and other companies that invest in gaming have a clear understanding that games are more than just an experience of immersion in sound and graphics. Gaming is a communal social experience. Multiplayer games have their alliances and enemies, but the whole process of playing brings people together into a unique fantasy world.
A solid voice chat system makes interactions with players smooth and hassle-free. Clunky systems do not exactly help gamers remain fixated on their sessions. Curse Voice is definitely a solid system, which is why it is compared favorably to Skype.