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Strategy Briefing

Amazon in Home Care: A Credible Competitor

May 2018

US$1,325

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About This Report

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If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

Amazon is widely regarded as “king disruptor”, but in order to grow and defend it’s number 1 internet retailer position in the face of stiffening international competition it will need to break into new areas, regionally and in internet resistant categories. There is clear investment in grocery offers, and its efforts to progress the laundry proposition are indicative of an overarching fmcg “frictionless commerce” strategy, detaching transaction decisions away from the act of spending money, an

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Overview

Why buy this report?

Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Best-in-class

Amazon is widely viewed as the ultimate retailer in terms of “reinventing” retail and disrupting traditional channel structures in the pursuit of what it terms “frictionless commerce”. This has developed beyond bricks and mortar and now includes disrupting established online sales structures, with propositions merging additional elements, as set out below. These additions each look to be a management focus Amazon is deliberately turning into a stable of “best-in-class” capabilities.

The value emerging

This is not an isolated case of being an early mover - examples beyond Echo/Alexa include smart home adoption, web data services, e-readers and content on demand. The latest experiment is Echo Look, focusing on apparel and the experience of trying new clothes. There is a consistent futurology-based competitive advantage at work.

All under one roof

Smart home propositions are based on the idea that traditional in-home consumer systems for managing chores and home entertainment can be improved by connecting multiple devices and activities, creating synergies from brands and different industries working together with better data sharing within IoT.

All the ingredients too

Looking at home chores, one theory is that brands operating in one part of a consumer system gain better control beyond their current scope by acquisition or alliance with brands from another part of the system (such as an appliance brand allying with food delivery brands, or building an own label detergent business).

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Introduction

Scope

How Amazon’s revenue splits out (2016 Annual Report)

Three strategic pillars (drivers of both growth and profitability)

Best-in-class

Strengths that cause rivals the biggest concern

Are you listening?

Futurology

The value emerging

A ll under one roof

All the ingredients too

S trategic surprise circa 2016

Miele: advantages of “system level” strategy

System strategy: creating good shopping experiences

System-wide an overwhelming advantage

Amazon’s scaled “system strategy” virtuous circles

Existing and Emerging Activities

US strength and global risk

Amazon needs to expand beyond its existing core success areas

Amazon activity is one driver for internet retail penetration by sector

The most disrupted retail markets

Some reasoning (1)

Moderately disrupted retail markets

Some reasoning (2)

The retail markets that are (so far) least disrupted by the internet

Some reasoning (3)

Amazon’s efforts to break into the USD5.6 trillion grocery market

Food retail is a necessary milestone to winning across all of fmcg

Food and grocery formats being evaluated: fresh, Go and “Pantry

Shopping lists are among the most used functions of Alexa

Food/grocery formats being evaluated: Dash and DRS

New Home Services started in US, and fashion remains a focus

“Last mile” fulfilment investment continues

Droning on

Post office

On the “Side” of the Consumer

Simulation: a different cost base can drive price-based disruption

Not everyone is a fan

Robin Hood

On The “Side” of the Consumer

Disruption of the idea that brands and retailers are aligned

The decline in institutional trust

Empire of t rust

Trust and the value of genuine recommendations

Amazon Prime’s impact on value, loyalty and reputation

Containment Issues

Success rarely goes unpunished

S ervices competition

Distribution policies

E xtreme measures

Range

Choice example

Pricing

Even specialists struggle

Device competition

Loyalty programmes

Logistics

Jet set

These are all reactions to yesterday’s success…what is next?

Smart Home Power Position

Range depth in the Amazon smart home stores versus rivals

The relevance of data storage and brand-owned data clouds

Amazon “Dash” and a future vision of fmcg auto-replenishment

The Dash button: background and implications (1)

The Dash button: background and implications (2)

The Dash scanner: background and implications

Dash Replenishment Service: background and implications (1)

Dash Replenishment Service: background and implications (2)

Smart home, Echo/Alexa and new home care value considerations (1)

Smart home, Echo/Alexa and new home care value considerations (2)

Having hardware, consumables and services under one roof

Grocery cracked?

The latest virtuous circle: the attack on fabric care and apparel

Future Trends

Future growth

New disruptions anticipated in the industry from Amazon

Pre-emptive retail

Amazon’s share of home c are: Is it a credible future leader?

US and Europe

Is Amazon a credible future leader?

Competition in the East

Competitive threats

What could disrupt the disrupter: tax issues?

What could disrupt the disrupter: regulatory threats?

A big beast

What can disrupt the disrupter: profitability issues for Amazon?

Final thoughts

Why buy this report?

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Megatrends

Strategy Briefing

Amazon in Home Care: A Credible Competitor

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Best-in-class

The value emerging

All under one roof

All the ingredients too

Want to find out more about this report?

Table of Contents

Introduction

Scope

How Amazon’s revenue splits out (2016 Annual Report)

Three strategic pillars (drivers of both growth and profitability)

Best-in-class

Strengths that cause rivals the biggest concern

Are you listening?

Futurology

The value emerging

A ll under one roof

All the ingredients too

S trategic surprise circa 2016

Miele: advantages of “system level” strategy

System strategy: creating good shopping experiences

System-wide an overwhelming advantage

Amazon’s scaled “system strategy” virtuous circles

Existing and Emerging Activities

US strength and global risk

Amazon needs to expand beyond its existing core success areas

Amazon activity is one driver for internet retail penetration by sector

The most disrupted retail markets

Some reasoning (1)

Moderately disrupted retail markets

Some reasoning (2)

The retail markets that are (so far) least disrupted by the internet

Some reasoning (3)

Amazon’s efforts to break into the USD5.6 trillion grocery market

Food retail is a necessary milestone to winning across all of fmcg

Food and grocery formats being evaluated: fresh, Go and “Pantry

Shopping lists are among the most used functions of Alexa

Food/grocery formats being evaluated: Dash and DRS

New Home Services started in US, and fashion remains a focus

“Last mile” fulfilment investment continues

Droning on

Post office

On the “Side” of the Consumer

Simulation: a different cost base can drive price-based disruption

Not everyone is a fan

Robin Hood

On The “Side” of the Consumer

Disruption of the idea that brands and retailers are aligned

The decline in institutional trust

Empire of t rust

Trust and the value of genuine recommendations

Amazon Prime’s impact on value, loyalty and reputation

Containment Issues

Success rarely goes unpunished

S ervices competition

Distribution policies

E xtreme measures

Range

Choice example

Pricing

Even specialists struggle

Device competition

Loyalty programmes

Logistics

Jet set

These are all reactions to yesterday’s success…what is next?

Smart Home Power Position

Range depth in the Amazon smart home stores versus rivals

The relevance of data storage and brand-owned data clouds

Amazon “Dash” and a future vision of fmcg auto-replenishment

The Dash button: background and implications (1)

The Dash button: background and implications (2)

The Dash scanner: background and implications