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Who Will Ultimately De-Throne Amazon as Rulers of Retail?

August 23, 2017

This piece is less of blog post and more of a question for debate.  In a retail industry dominated or threatened by Amazon in almost every direction, where business plans are regularly being re-written in response to their strategic initiatives, when will another business come along to steal their competitive thunder and who will the individual pioneer be?

It’s not a matter of if Amazon will be beaten, but when it will happen. And if you’re its King Jeff Bezos, who should you be concerned will become leader of the eventual coup? You can’t rule forever after all!

Every generation spawns a new dawn of innovation. The historical retail industry timeline is dotted with former market leaders who eventually lost their crowns to new entrants with a different take on competition, technology and market development.

In the late 19th century Sears, Roebuck & Company pioneered the mail order catalog (American spelling because Sears in Stateside!), which in its hayday was over 500 pages, coined the Big Book, and sold everything from sewing machines to bicycles, sporting goods and automobiles.

At the turn of the 20th century, self-service was not widely available in grocery stores with all goods kept behind a counter.  You can see examples of this type of serviced shopping in the shops in the town centre of Beamish, the North of England Open Air Museum.  This changed in 1916 when a Memphis Piggly Wiggly grocery store created a “cafeteria grocery’ where shoppers could browse shelves and pick up items themselves.

Macy’s was founded in 1858 and its store in New York City became known as The World’s Largest Department Store – Harrods took department store retailing to another level through the first introduction of the escalator in 1898 in England.

But Richard Warren Sears, Alvah Curtis Roebuck and Rowland Hussey Macy probably never foresaw post WWII Sam Walton and his Wal-Mart Stores, Inc. and their massive out-of town stores coming as heir apparent as retail market leader.

And neither would Sam Walton have expected Amazon, as an ecommerce book retailer founded by former investment banker Jeff Bezos, to so fundamentally disrupt the global retail industry from the foundations of brick and mortar retailers.

So what and who should Jeff Bezos be worried about?

Perhaps Amazon’s latest innovations hint at where the power is heading and how it will be beaten in the future? Amazon Go, grocery shopping which bypasses the need for checking out at tills, and Instant Pickup, where you can order and pickup snacks and drinks within 2 minutes, are further Amazon breakthroughs in technology-enabled shopping convenience and speed.

Neither involve home delivery, where Amazon’s breakthrough ecommerce service started.  And although Amazon owns more vans than the biggest couriers in the world and has its own fleet of 747s with a drone delivery R&D programme promising to make deliveries even faster in the future, all these investments are about getting mass produced products from point A to B.

However, the future of ecommerce may be tilting more towards getting customers from A to B.  Take for example, click and collect, which has fuelled a huge share of ecommerce growth on the High Street in the past 5 years.  Volvo and VW both have “smart boot” R&D initiatives enabling ecommerce deliveries to made to car boots via remote access when for example a customer is at work and their car parked in a public space.

In the realms of infrastructure, there are massive innovations being explored to radically disrupt global manufacturing and transportation.  Many a text book chapter have been written over the years on the virtues of “frictionless commerce” a mantra for retailers to simplify and accelerate the path to consumer purchase.

What are the innovations and commerce models that could truly threaten Amazon in the future?  3D printing is already rapidly transforming the manufacturing sector – imagine a world where less bulk stock is manufactured and held in large Amazon warehouses but instead more products are made to order in disparate locations or at customers’ own homes?  Now imagine a world when you can travel from Los Angeles to New York City in under 1 hour and the all the extra shopping journeys you might make in person because its quicker and more satisfying than home delivery – and how fast and efficient those same transport systems could be at connecting customers with products via forms of delivery.  And finally, a world of grow-your-own food powered by alternative energy so fewer and fewer deliveries and / or collections will be required from grocery stores.

There’s already someone who has a head start on building foundations needed to win big in this potential future retail world: Elon Musk.  Hyperloop has stolen headlines as having the potential to be the first massive innovation in mass transportation in decades – it also would be a massively efficient retail product distribution infrastructure.  Mr. Musk also owns SolarCity, one of the largest solar power companies in the US and his Tesla Corporation is one of the biggest 3D printers in the world.  It would be a perfect storm of retail disruption if these capabilities converged together in the future retail world envisioned above.

So hey Jeff Bezos and Amazon – watch out for Elon Musk or more likely his unborn daughter, as it will probably take until 2040 for this to all materialise!  Might sound like science fiction (or a storyline from Terminator!), but Musk founded SpaceX with a vision of wide scale manned space flight and growing crops on Mars!  And as a visionary, he probably has a better idea than the brain trust at Facebook of where virtual reality technology might head in a future where we wear headsets to augment our shopping experience.

If the founders of Sears Roebuck had time travelled to the modern era they wouldn’t believe Amazon with their own eyes, so the sky is definitely not the limit of what could be possible.

Who do you think will beat Amazon come 2040?

Written by Vic

Vic is CEO and founder of Venture Stream. A digital entrepreneur with a heart, US-UK cross ponder, Harvard graduate and aspiring park ranger.

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