E-Business Strategy Assignment DELIVERABLES:
1. A 4-6 page paper. APA Formating. Minimum 3-4 references
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E-Business Strategy eight unique features Paper and memo Amazon’s e-Business strategies.
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2. A short MEMO to the CEO of Amazon stating your opinion of Amazon’s e-Business strategies. APA Format.
Read Amazon Article (attached) and assess it in terms of the eight unique features of e-commerce technology (attached as jpeg) described in Table 1.2.
Which of the features does the company implement well, and which features poorly, in your opinion?
Prepare a short memo to the president of the company you have chosen detailing your findings and any suggestions for improvement you may have.
please use the article on Amazon that I have attached to this assignment.
Read the article and, in your paper, discuss the eight unique features shown in Table 1.2 in the book
and in light of the information you glean from the article.
Please also include in your paper an analysis of the information in the article.
This is “current event” information and, thus, very valuable.
Discuss Amazon’s dominance and disruption mentioned in the article.
Also, analyze the e-Business strategies discussed in the article and the impact these strategies have on the marketplace.
Book: E-Commerce 2016 9780133938951 12th Edition by Kenneth C. Laudon, Carol Traver Prentice Hall 2016-01-04
Michael Hogue/Staff Illustration
RETAILERS
Amazon swallows up sales
Brick-and-mortar stores and online-only retailers alike fear giant’s
relentless appetite
By MARIA HALKIAS
Staff Writer mhalkias@dallasnews.com
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There’s one threat that bonds traditional retailers and their online-only competitors — one big thing they can
commiserate about: Amazon.com
Amazon is getting bigger and smarter, and it’s sucking all the oxygen in the retail space from small online
retailers to the biggest brick-and-mortar merchants.
As big retailers like Macy’s, Kohl’s, Gap and Victoria’s Secret reported financial results this week that showed
they couldn’t get any traction, some fingers pointed to Amazon, or at least at the disruption that it’s leading.
Last year, Amazon accounted for 60 percent of all U.S. online sales growth, according to Forrester Research.
Forrester estimated that Amazon captured $23 billion more in U.S. e-commerce sales in 2015, including its
third-party marketplace. It’s not only the largest e-commerce company, but its growth has also outpaced that
of overall online retailing.
Amazon has everyone hopping to deliver everything to you faster. Now it’s getting into the apparel business
with its own clothing labels.
But instead of slapping Amazon Basics on its new fashion apparel the way it did in 2009 with batteries, cables,
cords and electronics identical to RadioShackbranded mainstays, it’s made new labels.
The under-the-radar brands were first reported by Women’s Wear Daily earlier this year: Franklin & Freeman,
Franklin Tailored, James & Erin, Lark & Ro, North Eleven, Scout + Ro and Society New York.
Seattle-based Nordstrom also reported weaker sales this week.
“It’s not a regional thing. It’s not a product-specific thing. It’s happening to everybody,” Pete Nordstrom, co-
president, told WWD Thursday.
Amazon’s impact on stores is coming as malls are losing traffic. It’s a double whammy for department stores,
the traditional anchors since the start of America’s malls 50 years ago.
“Clearly Amazon is a major factor in our industry. No doubt about it. How much does it impact us, I don’t
know, but we take it really seriously,” Nordstrom told the fashion business publication.
Delivery game
Companies collectively have been spending billions of dollars to compete with Amazon, which seems to have
moved the shopping epicenter to the home even though about 90 percent of U.S. retail sales still happen in
stores. It’s forcing retailers to think of same-day delivery whether it works for their business models or not.
“Amazon has singled-handedly made same-day delivery the new standard,” said Daphne Carmeli, founder
and CEO of Deliv. “We all expect it because Amazon told us we should.”
Deliv provides same-day delivery for major retailers including Macy’s, Best Buy, Williams-Sonoma and
Walgreens and for several e-commerce companies, such as Plated, Google Express, BloomThat and FarFetch.
UPS, the world’s largest shipping company, made a $28 million investment in Deliv in February.
In March, Amazon said it will lease 20 Boeing 767 wide-body jets for its own air cargo network.
“So if you’re doing business in this world, you need a response, and that’s what’s driving everything,
thankfully for us,” Carmeli said. She will speak on a panel next week at the Shop Talk conference in Las Vegas.
For its debut, the conference will bring together legacy retailers and venture capital-backed companies that
are disrupting retailers. The conference, sold out with 3,000 attendees, includes 375 CEOs from old and new
companies.
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Last month, Best Buy added same-day delivery to 11 more markets, including Dallas. The announcement
followed Amazon’s expansion of free same-day delivery for Prime members in more cities.
This week, Wal-Mart, which has struggled to grow its online business, said a pilot program designed to
compete with Amazon Prime just got faster. Wal-Mart began offering three-day free shipping last year with a
$50 annual member fee in its Shipping Pass program. Now that pilot program offers a two-day free shipping,
and the annual fee has been cut to $49. Wal-Mart won’t say where it’s being tested, but a spokesman did say
it’s not in Texas yet, although people can join a wait list.
Even omnipresent Google is losing out on product searches as the growing list of Amazon Prime customers
skip its home page for their go-to shopping site. Amazon doesn’t release the exact number of its Prime
members but has said the number who pay $99 a year for free shipping and other perks are in the tens of
millions.
Consumer Intelligence Research Partners estimated it jumped 35 percent last year to 54 million, or about 1 in
5 adults. Those memberships are shared within households, which makes Amazon’s customer count much
bigger.
All retail companies — whether they operate only online, only in stores or in both — cannot minimize the
effect of Amazon on their business, said Richard Last, senior director at the University of North Texas’ Digital
Retailing Research Center.
Amazon moves ahead
Wall Street research firm Cowen & Co. said this week the recent poor results from traditional retailers
strengthens its prediction from last year that Amazon will supplant Macy’s as the largest U.S. seller of clothing
in 2017. In April, Cowen also forecast that Amazon will move ahead of Target, CVS and Walgreens to be the
No. 2 consumable products retailer behind Wal-Mart.
It may already be the No. 2 retailer, period, behind Wal-Mart, Last said.
“If you calculate the gross merchandise value of all sales transacted through Amazon’s shopping cart,
including Marketplace, they are the equivalent of the No. 2 retailer behind Wal-Mart, and they continue to
see strong double-digit growth,” he said.
Amazon’s recent grocery focus represents a big threat to the consumables category, Last said. “It is a real
challenge for retailers to compete with Amazon’s unique technology-driven business model.”
Wal-Mart and Kroger are quickly trying to get Dallas-area consumers accustomed to grocery services that
allow them to order online and pick up at the curbside. Wal-Mart started rolling out curbside service last year,
and Kroger has plans to begin it this summer.
Traditional retailers also face ongoing pressure from Wall Street to close big numbers of stores as Amazon
picks off categories including books, consumables, electronics and now apparel.
“There’s a real strategic shift to e-commerce, and business will continue to shift online. But we can do both,”
said J.C. Penney CEO Marvin Ellison. “If a pure-play retailer acquired a company with 1,000 stores, I doubt
they’d be rushing to close them all.”
When a store closes, customers don’t just automatically shift their business to that retailer’s online store. Last
November during a conference call with analysts, Ed Record, Penney’s chief financial officer, said there’s “a
mis-perception out there that when you close a store, those sales just transfer online.”
Pushing pickup
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Retailers are using their stores as mini-fulfillment centers and believe they have an advantage as a place
where customers can pick up orders they don’t want left at their doorstep. Stores also can give immediate
refunds on returns.
Traditional retailers also are building up their private-label apparel, which represents about 20 percent of the
assortment at Macy’s and doubles when exclusives it gets from vendors are added in.
At Plano-based Penney, private-label brands represent just over 50 percent of the store, and that number will
rise, Ellison said.
To offer shoppers products that Amazon doesn’t have, Penney is “aggressively working to increase that
percentage,” he said. “We want national brands that matter and a strong stable of private brands, which offer
a level of protection as we compete online.”
Ellison said Amazon may be finding out how hard it is to create its own apparel brands.
“Read the customer reviews,” he said. “Trust me, they matter. The wisdom of the society that we live in is
more important than any marketing.”
Twitter: @MariaHalkias
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