Amazon has very limited physical store presence due to it being primarily an ecommerce company. This can deter some new customers because not everything can be sold online. You can have the best product, price, shipping, and return policy of all online companies but there are still going to be those customers that you lose because they want to physically see, touch, or try on the product that they’re buying. Dozens of powerful e-commerce players who began with an online-only business model are beginning to see the potential for expanding into physical retail. Even Amazon, the
company that symbolizes the transition to online shopping, has opened a physical store in Seattle and plans to expand further (Kittaneh, 2018). Having a brick-and-mortar location is just another way for Amazon to expand and to connect with their customers. Face-to-face interactions via a physical store can help increase the already high levels of customer service that Amazon has. Opportunities Amazon’s most glaring opportunity is to continue to expand, be it by improving in the international market, acquiring more ecommerce companies, or by adding more physical online stores. Amazon has dominated in the U.S. market but its presence in the international market is greatly lacking. Since its start Amazon Prime has been a major driver behind the success that Amazon has seen in the U.S. Amazon currently offers Prime memberships to residents of 17 countries worldwide. Prime is also the key to Amazon’s international expansion in general. While the platform has influenced how people from all over the world shop, it still only makes up a small percentage of worldwide ecommerce sales. In 2018, for instance, we forecast that Amazon will make up 13.7% of the worldwide ecommerce market and just 5.6% when the U.S. is excluded (Enberg, 2018). Amazon has some tough hurdles to overcome by expanding into international markets that have their own established and trusted companies. Their biggest competitor in China, an environment hostile to foreign companies, is Alibaba who have matched and often beaten Amazon’s portfolio diversification, meaning Amazon’s share in the Chinese market is stuck below 1%, leaving them lots of room for improvement (Coren and Hao, 2018).
Domestically Amazon can put more effort into acquiring additional ecommerce companies; by obtaining more of these companies Amazon can continue to diversify their domestic assortment of products. Amazon’s merger and acquisition strategy is focused on underserved market areas with high transaction volumes and undifferentiated channels that deliver margin growth. Simply put, Amazon is looking for opportunities that will help them build and extend new business models (Columbus, 2018). Moving to and reinventing how customers shop at physical stores is another market that Amazon can tap into. Amazon is well known for thinking outside the box and being innovative, even in failures, and moving into the brick-and-mortar store front isn’t any different. In 2018,
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