How Amazon emerged as an 'everything store'

This article discusses how Amazon emerged as an 'everything store' and its strategic leadership in combining various domains to attain competitive advantages. It also explores Amazon's innovative approach towards supply chain management and its implications on the Australian retail sector.

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How Amazon emerged as an ‘everything store”
Amazon, an American multinational technology company has been founded in 1994 and
previously recognized as Cadabra went online in 1995. Reports of McGurl (2016) have revealed
that it was in the same year that the company launched an online bookstore and within two
months its revenue raised by $20,000 per week. However, according to Bao and Chang (2014),
Amazon initially failed to accomplish significant prominence in e-commerce sector, mainly
operated as a supplier of household goods and lacked a proficient vision like other technology
giants like Google and Facebook. Amazon with its strategic leadership of CEO, Jeff Bezos has
combined domains of consumer retail, FMCG, healthcare, data science, entertainment and
robotics has substantially created a global business operation with synergies and economies of
scale which aided the company attain competitive advantages in the global technological sector.
As per Sucharita (2016), Amazon, with its initiation as an online bookstore retailer eventually
involved everything ranging from its book to read to the websites individuals regular consume
with several other retail and technological services.
At this point of discussion, Bao and Chang (2014) have noted that Amazon with its
considerable prominence in the field of digital commerce, it has developed to be considerably
more advanced than other technical infrastructure and data management which retained
company’s competitive advantage. Meanwhile, comprehensive studies of Sucharita (2016) have
revealed that Amazon by proficiently offering robust and reasonably priced technical support, it
launched Amazon Web services, which is a subsidiary of Amazon providing on-demand cloud
computing platforms to individuals, companies as well as governments. Such cloud computing
services like AWS currently has been generating revenue of more than $12 billion (Amazon.com
(2019). Furthermore, Amazon’s business operations did not stop at this juncture. Reports of

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Sucharita (2016) have mentioned that alongside with AWS, Bezos has been successfully
operating its hardware business segment comprising Kindles, tablets along with AI-powered
home speakers and recently launched doorbells which tend to compliment its product delivery
business. These evidences have aided the company in attaining a significant position as a leading
stakeholder in the international fin-tech sector.
Although, Bao and Chang (2014) have claimed that well established technological
companies are showing a tendency to disrupt financial services, Amazon has been strategically
operating its business by executing its cloud computing services to lower barriers in order to
make an entry for fintech start-ups and further recalibrate the technological sector. In addition to
its major achievements, Amazon’s customer service has been taken into consideration which
focuses primarily on the customer and uses predictions in order to determine probable fashion
trends (Amazon.com 2019). Murrell (2014) has noted that rather than investing on expensive
promotion and marketing initiatives, Amazon essentially relied on positive reviews along with
word-of-mouth marketing strategies to attain competitive advantages in the industry. As Amazon
truly realizes the needs and demands of its consumers, it is recognized as an organization which
proficiently energy and resources towards providing its buyers with extensive range of products
at economic price range thus successfully developing as an ‘everything store’.
Amazon’s innovative approach towards the company’s global supply chain management
Amazon within two decades has emerged as the most form eatable and leading force in
the retail sector. Amazon's original and innovative approach towards its supply chain
management has been essential to its achievements and further ensuring that it can attain millions
of items to its customer base with appropriate pricing and rapid delivery service than any other

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retail giants across the world (Yu et al. 2016). Such an innovative approach towards the
company’s supply chain management has altered its consumers’ expectations and demands for
shipping expenses and speed. reports of Ittmann (2015) have revealed that several small to
medium size businesses have constrained their resources and have being experiencing critical
challenges to offer their customers such as two day or even same day shipping in comparison to
Amazon’s Rapid service delivery. However, Ulmer (2017) has claimed that these new delivery
expectations are attainable for small and medium size businesses. According to Yu et al. (2016)
half of the items which are offered by Amazon are mainly from the small and medium size
business suppliers, thus having options to sustain the new standards established by the online
retail giant. Moreover it is important to highlight that Amazon’s successful launch of Amazon
Prime which is an annual membership which offers ‘free or today shipping’ services for over
thousands of items has received substantial prominence and success in the retail industry.
Considering shipping Amazon's products to fulfillment service where consumers can
Store pick pack or ship has been primarily based on the globalization of World Trade has been
highly effective for the business (Ittmann (2015). In the view of Chopra and Sodhi (2014)
fulfillment centres have the ability to reduce or eradicate the complexities of self manage storage
and further help in enhancing delivery timings as the company already comprises the
infrastructure in place and confirm the expand the costs across multiple clients during
globalisation. Reports of Ittmann (2015) as mentioned that same day and one hour shipping and
not identified as options which traditional third party logistics providers such as ups and FedEx
have been highly aware II and competent to handle such service delivery. However in relation to
Amazon’s outsourcing distribution across the world the company has shown immense
dependence on its own fleet of delivery vehicles in order to accomplish same day delivery.

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Meanwhile comprehensive studies of Farahani et al. (2014) have mentioned that while
low cost and rapid service delivery have been highly significant and prominent in e-commerce
domain in recent times author of shed light on the deficit of Amazon’s scale as well as resources.
Through global supply chain strategy of Amazon will intend to distribute the product
accessibility and drastically reduced the company’s expenses and further accelerated product
delivery to consumers. However the planned supply chain management by Amazon has been
primarily aimed for a global delivery network which controls the flow of goods from factories in
China and India to its customers’ doorsteps in Atlanta, New York as well as London. Moreover
the planned is massive in scope which has been bypassing brokers which deal with cargo as well
as global transit formalities (Amazon.com 2019). However through this planned supply chain
management retailers will be enabled to book cargo space online or via mobile devices thus
creating Amazon’s ‘one click ship’ approach for seamless international trade and business.
The Future of E-Commerce
Amazon is successfully leading the way into the real world as online real-estate as the
next major frontier for retail. From Amazon to other small retailers across the world like Vita
Group Limited are intending to get their products in front of their consumers. Reports of Grewal,
Roggeveen and Nordfält (2017) have revealed that in the last few years, around 75 online
companies in developing nations such as US, UK and Australia have introduced physical
presence to enhance market their wares and forge closer consumer relations and amplify online
traffic as well as sales. However, such a development further reflects the extensive industry
imperative regarding ‘omni-channel’ retailing whereby retailers intend to offer buyers with
seamless experience whether digital or through traditional retail store. Regardless of the rise of e-
commerce, physical stores will encounter an insignificant level of competitive edge (Pauwels

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and Neslin 2015). This is because as they tend to be in a direct with brand and thus aid buyers to
see and observe the product range and its variations in person.
However, physical stores are no longer been viewed as store houses but has been
gradually perceived as an authentic and effective marketing tool. In addition to this, the newly
emerging concept of show-rooming mainly aims to enable customers to check, judge and find
products as per their choice in physical stores while offering them the significant avenues to buy
those products online. However, Pantano and Viassone (2014) have noted that this business
concept has not yet gained substantial success but is likely to gain significant prominence in the
next 2 years in order to limit the level of loss. As reports of Rapp et al. (2015) have claimed that
purchases which are made online, typically encounters around 25% to 45% lower revenue rate
than its traditional counterparts. According to Pauwels and Neslin (2015), in such a context,
physical stores will no longer tend to seek profitability and effectiveness but will rather intend to
offer consumer base an affluent and exceptional customer experience. Such a drastic shift in
concept in the view of Lin and Lekhawipat (2014) implies that companies must be equipped in
order to emerge as perfect standard-bearer for their respective brands. For example, Adidas,
renowned sportswear manufacturing brand with its business across the world has a single pair of
shoes available to strategically redirect its customers to its online platform. Thus, the brand has
thus shifted from a transactional approach to a model which aims to value its customer in-store
experience as well as the sense of exclusiveness and selectiveness.
On the other hand, reports of Grewal, Roggeveen and Nordfält (2017) have highlighted
estimation where it has been claimed that the turnover generated by e-commerce is anticipated to
rise exponentially to the detriment of retail. Furthermore, the rate of sales generated from
physical stores and ecommerce are likely to encounter each other at around 650 million dollars.

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Moreover, the distribution is very different from the one being projected in 2017: 900 million for
retail and 100 million for e-commerce. Furthermore, there are certain indicators of gap between
e-commerce and traditional retail. Pantano and Viassone (2014) have mentioned that online
companies have recently initiated to use pop-up stores in order to reach consumers through
approaches which are unworkable in a virtual way.
Amazon’s implication on Australian retail sector
Amazon is currently executing its business operations in 14 countries and is likely to gain
substantial achievements in Western markets similar to the United States such as the UK and
Germany. However, other markets which Amazon currently operates in are several times larger
than Australia with Canada probably being highly comparable market in relation to overall size
and geographic immensity. Nonetheless, as per reports of Xu, Gao and Hammond (2017), the
shortage of local warehouse significance, Amazon is already operating as leading retailing
domain in Australia constituting an estimated 9.5% market share. Moreover, highlighting the
critical implication of Amazon’s entry in Australia by the end of 2019 relies implies that certain
retailers will have the tendency to impact local retailers at a greater extent in comparison to other
sectors. Such a critical implication leads to incompetence for consumers to see drastically lower
prices with Amazon’s arrival in Australian market (Verma 2018). Furthermore, in comparison to
Australian retailers, Amazon typically operates in a different scale with frequent delivery and
supply of millions of products. However, Lewis and Phillipov (2016) have observed that with
cost pressures on Australian retailers likely to be reserved, product abundance will be serving as
a chief differentiator for Amazon. On the other hand, Ritala, Golnam and Wegmann (2014) have
noted that with Amazon’s entry into the Australian market, several buyers with high expectations
have been disappointed by the limited product range when Amazon introduced Australian

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website. Moreover, Amazon’s disruptive decision of blocking Australian consumers from
purchasing on its international website as it did not want to comply with new GST laws.
Nonetheless, regardless of such a critical decision making, Amazon will tend to dominate the
Australian retail landscape in next few years. Moreover, Amazon’s transport operation
management is likely to open significant avenues for multiple local retailers of 3PL businesses to
collaborate with Amazon and extend service to an important client with huge volumes (Verma
2018).
Furthermore, Amazon will further initiate to invest on their distribution network as their
operations grow and get equipped to logistical challenges in Australia. Through the launch of
Amazon in Australia, there is a potential for several technical expertise and supply chain
innovations to be introduced which will eventually revolutionize the logistics sector within the
nation. However, many of local leading retailers in Australia have focused on developing their
online strategy to combat the perceived Amazon threat (Xu, Gao and Hammond 2017). For
example, local supermarket giants Coles and Woolworths have been offering free same day
delivery for customers who have been spending over $155 and $350 respectively. Ritala,
Golnam and Wegmann (2014) have noted that Amazon’s relentless focus on customer
experience as well as innovation have led to the highly personalised and projecting supply chain
model. Thus, Australian retailers to successfully survive and co-exist with Amazon will require
elevate their development level in all supply chain areas.

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References
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