Amazon Faces Bright (Dark?) Future
New research from Forrester on Amazon.com got me thinking (stretching actually) about Schrödinger’s cat experiment. That’s the one in which an imaginary cat, locked up in box with an equally imaginary deadly poison, could be thought of as both dead or alive as long as the container remained closed. Open up the box and you get the answer that it is either alive or dead.
Okay, so I know that Amazon.com is clearly alive. In fact, by most analyses, it’s thriving. So where does the dead part come in?
A recent blog by Forrester’s Brian Walker discussed several scenarios whereby Amazon could face challenges that could result in a bleak, even fatal (my stretch, not Mr. Walker’s) future for the company founded by Jeff Bezos.
First, start with Amazon as an influential source of product information. Today, according to Forrester, 30 percent of all consumers begin their online product research on Amazon versus 13 percent with Google. When Forrester asked consumers the same question in 2009, 18 percent answered Amazon while 24 percent said Google.
The growing influence of Amazon makes it tough for retailers that are part of its marketplace of merchants. While Amazon is a high-traffic sales channel for these companies, it often is a competitor as well. Mr. Walker argues that Amazon has counted on affiliates to continue its growth and defections would take away one of its engines.
Another potential threat to Amazon is that it doesn’t pay very well and talent could wind up walking one day. Mr. Walker suggests that many of Amazon’s headquarters personnel joined because the company granted stock options. As Amazon’s stock price flattens out, those options will be worth less and talent may begin to seek greener pastures.
Other potential failure scenarios include Amazon getting too big to succeed, the company becoming distracted by Mr. Bezos’ side projects (such as private space exploration), and not being able to replicate its North American success in markets overseas.
So, I ask you, will Amazon stay alive? And, how did that cat make out?
- Amazon: Friend or Foe for Retailers? – Forrester Research
- Amazon.com: Friend or Foe? – Forrester Research
- Amazon Influences Consumers More Than Google (And Possibly Facebook And Apple) – Forbes
Discussion Questions: What do you see as the biggest challenges/potential pitfalls for Amazon.com going forward? Where are its greatest opportunities?