Current Trends in the Retail Industry: An Analysis of Amazon

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Current trends in the Retail Industry (Amazon)
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Table of Contents
Introduction......................................................................................................................................3
Trends in the retail industry.............................................................................................................3
Analysis of the organisation............................................................................................................4
Recommendations............................................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
The retail sector has undergone a significant change over the past few years, and it continues
evolving quickly. In this report, several trends and aspects of the retail industry will be discussed.
For giving the better description of the strategies and concepts, Amazon has been taken into
consideration. Amazon.com is a transnational electronic industry that founded in the year of
1994 (Amazon.com, 2019). The organisation is the largest online retailer within the region of
America with a huge of consumer products like books and other items.
Trends in the retail industry
In an organisation, the internal and external surroundings are the most important factor to carry
out the company’s operation (Giovenco et al., 2014). The process of changes is known as the
trend and the retail industry has to imply with these trending change as meet at the consumer’s
demands. In the competitive market, the companies who fail to adopt some trends they are
downfall in their business. In recent time, brand requires to look more purposefully and actively
at the culture buzzing around them in fashion, in entertainment or social media. Besides, they
utilize it to inform the consumer how they are in the market (Amazon.com, 2019). Trend is the
very important aspect within the retail sector. Due to competitive edge in the market, retail
sectors are more focusing on development and improvisations in their services and products
(Pantano, 2014).
The development of technology has directed towards a prevalent culture in the retail sectors i.e.
impatient customers. In recent generation, consumer want to receive a communication response
within 10 minutes, compared towards the previous generations that anticipated a feedback within
10 days. Consumers want the immediate outcomes and retail sectors require both expanding and
speeding up their services to respond to the immediacy culture (González,and Waley, 2013).
This has speeded up the change process in tends within the market. E-commerce continues its
demonstration to become the most popular shopping medium around the board. In recent time,
most of the brands have an online process and they all provide comparable price in their products
(Amazon.com, 2019). A retail sector like Amazon has become extremely homogenous in this
consideration.

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This trend is set to constant well in 2019, as brands would evaluate new ways to separate
themselves from an increasingly saturated crowd. Another trends, which has been observed
within the retail sector is the digitalisation trend (Falguera et al., 2012). Digitalisation is the
result of advanced technology and the society modernization. Most of the retail sectors have
started their online websites and portals to experience the effect of digital technology. However,
large size has ceased to be an asset, as the smaller organisations are capable to implement more
easily these dynamic business surroundings.
The digital revolution has totally modified the way of business, which should be carried out by
the retail sector. This supports the company to promote their products and services towards their
existing consumers by using the online platform (Pantano et al., 2017). On the other hand,
several retail sectors have proposed their individual portals and many of them have used the
social media to promote their services and products. Due to the effect of digitalisation,
consumers may obtain the items and services of any desired company without being physically
present with the company. This process is recognised as the online shopping. Several companies
are implementing the digitalisation trend for performing well and obtaining competitive
advantage within the market (Iannone et al., 2013).
Today’s buyers are also widely seeking their shopping experience, which is tailored towards
their preferences and delivered unswervingly to their doors. The convergence of these trends has
resulted within the emergence of subscription e-commerce and business, which may curate the
items and ship them towards consumers on a daily basis (Haufler, 2013). One of the attractive
dichotomies of the recent retail structure is that in spite of their alarming closure rates, brick-and-
mortar sectors still act an important role within the process of sales. Besides, it has transitioned
from the starting point of sales to being section of a broader retail strategy. This is extremely an
outcome of changing the methods in consumer’s mind to make the shopping decisions.
Apart from that, many of the companies have adopted the online payment method for making
easy for consumers in terms of their purchase products (Jayashreeramanan and Ramankumar,
2014). Some of the retail sectors have started the loyalty programs to maintain the relationship
and continue involvement with their existing consumers. Further, consumers are rewarded with
voucher and gift for their regular basis shopping.

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Analysis of the organisation
Amazon is the largest online retailer around the world and is lead the way within the platform of
online retailing. Besides, Amazon has expanded internationally and how controls around the
world through a combination of logistic platforms and localized portals. They are expanding
their large part of the business in the region of America (Agyeman and McEntee, 2014). Their
main products are books, garments, technology devices and many other things. Nowadays, they
have started Amazon prime video in which consumers watch several serial, cinemas by
subscribing it.
Amazon has to reorganize about their existing business model at close to zero margins and the
fact, which organisation has not returned an honest profit in the last 5 years provides it much
room for development (Amazon.com, 2019). However, the company has faced many problems in
the competitive market. These problems are solved with the help of SWOT analysis.
Strengths  Amazon delivers its strengths initially from a three-
pronged strategic trust on differentiation, focus and cost
leadership.
 All of their products are accessible at very affordable and
reasonable price that develops them available for major
section of the population.
 One of the main strengths of Amazon is that it
experiences top of the mind evoke from customers
internationally and this recognition has supported
them to enter new markets (Pousttchi and Hufenbach,
2014).
Weaknesses  Amazon provides free shopping to their consumers, it is
within danger of losing its margin and may not be capable
to optimize on the price as because of the strategy.
 They have a business model, which other companies may
easily emulate. For instance, other companies could
simply set up an online retail website, which would sell
just about anything.

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Opportunity  Amazon has opportunity towards penetrate the developing
markets.
 The organisation has also the advantage to open more
brick-and-mortar stores towards develop competitiveness
against any large sectors (Hortaçsu and Syverson, 2015).
 The company has started the schemes of discounts in their
items that build them accessible for the people with low
income (Amazon.com, 2019).
 Amazon offers chain of items of relatively low costs
increasing their demand within the market.
Threats  Amazon faces significant threats within the online retail
market.
 Amazon must strengthen their network security to deal
with the cyber attacks (Amazon.com, 2019).
 Large retail industries like Wal-Mart are continuing their
efforts to develop their online retail presence.
 Large-time recession have the options for lowering the
sales of Amazon products.
Table 1: SWOT analysis
(Source: Learner)
The method of Porter’s five forces may be brought into account for assessing the external
environmental factors of the organisation.
Competitive rivalry
In the online retail sector, competitive rivalry is extremely high, as the numbers of player have
grown in past few years. The main competitors of Amazon are Alibaba, eBay, Flipkart and
others (Huang et al, 2017). There are many retailers, which especially target specific products
like electronics, apparels and other things. This has directed to intense rivalry for the Amazon.

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Threats of new entrants
The growth and expansion of retail of digital technology has created many changes within the
retail industry. Numerous new brands have entered in the e-retail segment. These brands may
enter the market but not capable to take on giant such as Amazon. Therefore, threat of new
entrants is low for the company.
Figure 1: Porter’s five forces analysis
(Source: Google.com. 2019)
Bargaining power of suppliers’
The company has always ensured that their suppliers is always followed the working rules at
their work locations (Willer and Lernoud, 2017). The switching price for supplier of Amazon is
almost negligible. There are many suppliers, which are ready to supply Amazon with the needed
items. Thus, supplier bargaining power against Amazon is low.
Bargaining power of buyers

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Amazon lays numbers of stress on the product quality and consumer satisfaction. Buyers are well
known about the product’s cost due to enlargement trend of online retailing, as they have many
options to go. Thus, buyers have strong bargaining power against Amazon.
Threats of substitutes
The substitution towards Amazon are sector such as Wal-Mart, Flipkart sell their products at
reasonable price. Amazon does not sell anything exceptional, as it faces high threat of
substitution (Amazon.com, 2019).
Recommendations
Retails companies are getting a huge amount of rising now and this help them in order to make a
perfect place in the international business market. Retailers generally sell goods to their
customers on a daily basis when they need. This is why customers are getting attracted towards
the retail industry and this causes a rapid increase in business for the retail industry (Huang et al,
2017). Retailers are now getting more involved in delivering perfect quality products in order to
defeat their competitors.
How your company will perform?
Amazon is one of the best companies in the worlds and this is quite natural that they will have a
certain level of competitors in their field. It is recommended that Amazon take some important
strategies to counter the effect of several competitors in the market. Amazon Company must
ensure lower cost for production, so they can deliver their products to their customers at a
reasonable rate (Amazon.com, 2019). It is recommended that this company will deliver quality
production until the cost of the production goes higher than the selling products. For this kind of
problems, cost management team need to take some steps for reducing the production cost
without having any compromise with the quality (Hortaçsu and Syverson, 2015). Amazon
maintains strong organizational bonding to get the optimum level of production from their
employees. This is why this company recruits some outstanding managers in their management
team to ensure good quality. Amazon generally uses certainly improved technology for getting
top quality production within a short time and low production cost. This will surely provide an
advantage to this company in order to beat other competitors in long time business race.

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How can they improve their sales if they are not doing well?
Amazon generally delivers its top-notch products at a reasonable rate in order to attract more
customers towards the company. However, sometimes they face problems with their selling
products due to issues. It is recommended that they need to maintain a good relationship with
good suppliers and maintain a proper supply chain to deliver the products to the customer within
the estimated deadline (Huang et al, 2017). Amazon needs to upgrade its facilities to attract more
customers while they are struggling to get proper customers. The management team needs to
maintain an overall turnover after a year to ensure a low level of threat during a struggling
period.
Amazon mainly delivered their sales in online mediums, as they are getting famous by reaching
more properly by using this online media. Nevertheless, this is recommended that they must
open some offline showroom for selling their products in retail. Amazon needs to expand its
stores in several countries where people can get a hand on experience. These steps will surely
increase the revenue of the company since people are still preferred to buy products by hand on
experience rather than online shopping (Agyeman and McEntee, 2014). Amazon needs to survey
the market and need to make a proper list of competitor’s nature in the market. Business
management of this company needed to be upgraded in these several factors. Amazon Company
will get more profit if they adhere to these recommendations.
Conclusion
In the competitive surroundings, Amazon has efficiently managed its place between the top most
retail sectors. Besides, there are some regions for development in business and marketing
strategies of Amazon. These may be developed by assessing with the suggestions given to
company. By following suggestions, the company may perform its organisational operations in
better way. Further, these support them to achieve the organisational objectives more effectively.

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References
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Amazon.com. (2019). Amazon.com: Amazon Prime. [online] Available at:
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Amazon.com. (2019). Amazon.com: Online Shopping for Electronics, Apparel, Computers,
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Giovenco, D.P., Hammond, D., Corey, C.G., Ambrose, B.K. and Delnevo, C.D., 2014. E-
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Hortaçsu, A. and Syverson, C., 2015. The ongoing evolution of US retail: A format tug-of-
war. Journal of Economic Perspectives, 29(4), pp.89-112.

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Huang, H.W., Wu, S.J., Lu, J.K., Shyu, Y.T. and Wang, C.Y., 2017. Current status and future
trends of high-pressure processing in food industry. Food control, 72, pp.1-8.
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Pantano, E., Priporas, C.V., Sorace, S. and Iazzolino, G., 2017. Does innovation-orientation lead
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