With every new business venture and announcement, Amazon reveals more and more about its true self, and it's seeming less and less like a retailer.
I've always marveled at the idea that Amazon is fundamentally a retailer. Sure, it sells goods and now services, but at its core, Amazon is a brilliant technology company—one built on code, efficiency and robotics.
And now we have Amazon Business, an ambitious B2B effort that stands to be Amazon's simples and most profitable yet. Amazon Business will likely deal a big blow to warehouse clubs such as Sam's and Costco, as well as the office supply retailers that compete for the small- to middle-sized business dollar.
Amazon Business replaces Amazon Supply, the online marketplace Amazon targeted at enterprise customers. The B2B marketplace in the United States is predicted to top $1 trillion by 2020, according to a report issued by Forrester. That's a big market and it also highlights just how much Amazon can maximize its scale and efficacy.
Amazon certainly isn't the first business to be considered more of a conduit to deliver goods than a merchant. Years ago Walmart positioned itself as that very thing: an agent to negotiate low prices and deliver goods in an efficient manner. Walmart's modern warehouses and systems were testament to this. It was even suggested that Walmart could actually succeed in India based on the fact that the country's transportation infrastructure was so underdeveloped that the retailer could conceivably build its own.
Which is pretty much what Amazon has done, albeit online.
The one thing that Amazon has struggled with most fails squarely within the skill set of a very traditional mercantile breed: fashion. Amazon is spectacularly good monitoring millions of prices and making adjustments in near real time. Amazon is extremely adept at earning consumers' trust with guarantees and online reviews, and it excels at delivering product wherever and whenever the customer wants it—all thanks to the underlying systems built to create and support the operation.
But Amazon has never managed to do more than sell on price and convenience, and the e-commerce czar still struggles to become a credible source for fashion, hence the many rumored acquisitions over the years.
The online marketplace price advantage is one-dimensional. Fashion is not.
Perhaps one day Amazon's Jeff Bezos will give up on the idea that Amazon will be a force to be reckoned with in the fashion industry. Or perhaps, and this is more likely, he will build or buy a technology platform that will compel the less price-sensitive style seeker to make Amazon her home. And once again, it will be because Amazon is, at its core, a technology company, not a retailer. -Laura