Amazon has grown from a fledgling online bookseller to the most valuable corporation in modern history. Amazon is so powerful that it has completely changed the way we shop. Just as impressive, they have accomplished this in as little as one decade.
The retail apocalypse is tearing its way through the United States.
Brick and Mortar stores are closing at an unprecedented rate. Malls across the land are dying. Department store giants such as Sears and Macy’s are shrinking at a rapid pace.
On the other hand, online shopping has taken off mainly due to the rapid growth of Amazon. In fact, the e-commerce giant has forced other retailers to either adapt or get out of the way.
Amazon had the ability to influence an incredibly important aspect of the shopping experience.
In essence, they focused on access, ease of use, and convenience that consumers did not even know they wanted. Amazon then concentrated on becoming the standard in this area.
Eventually, consumers started demanding access, ease of use, and convenience when shopping, and Amazon was already at the forefront to fulfill it. People often exaggerate how recent advances in technology have changed our lives.
However, it is difficult to overstate the significance of how both commerce and the overall marketplace has changed since the most recent turn of the century, particularly from 2000 to 2010.
Prior to that time period, shopping typically involved leaving the house in order to see and touch the products that we were interested in purchasing. It certainly took a great deal of effort.
In the current day and age, you can purchase just about anything, including a house, with the click of a button, or tap on a screen.
This momentous shift occurred in large part because of Amazon. It goes without saying that e-commerce has truly evolved over the past 20 years.
That being stated, Amazon absolutely did the most to change the way consumers buy, sell, and even transact.
They have been among the most innovative and control the vast majority of the e-commerce market. This has resulted in an economy that has forever changed.
According to a recent survey, in 2000 only 22% of Americans had ever shopped online. In 2019, 80% of Americans shop online on a regular basis.
This major shift has consequences for the way consumers purchase products, and for the labor market in general. Perhaps even more significant, Amazon has changed how the economy functions.
Believe it or not, in 2018 Amazon hit $258.22 billion in sales. That equals an astonishing 50% of the entire online market.
Amazon accomplished more than simply making it easier and faster for people to purchase items. They were able to alter the nature of commerce and along with it, the United States economy.
In essence, Amazon altered how and where people work, and also changed how prices are set and how often prices increase or decrease. For example, before consumers bought online, retailers would typically increase prices once or twice per year in direct response to competition and inflation.
In the current economic climate, online retailers partake in the use of algorithms, which change prices frequently in order to match demand.
Take a guess which company started the algorithm age? The answer, of course, is Amazon.
Price pressure and competition from e-commerce retailers led by Amazon are contributing factors as to why so many stores across America are empty, and gigantic retailers such as bookseller Borders are no longer in existence. Even the largest retailers with multiple chains are finding it incredibly difficult to survive, let along thrive in the current economic environment.
*Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Paymynt Financial is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.