This idea has been rolling around in my head for about two months (yes a scary thing!). And, finally transferred it to paper (or in this case, a blog).
Clearly, Amazon has transformed retailing by inventing the pure play concept of online retailing. The Amazon Effect is clear …
- Since its inception in 1994, its revenue has grown substantially with FY2015 realizing $107B in total revenue.
- Some milestones: 1-Click Patent (1999), Launch Web Services (2002), Amazon Prime (2005), Kindle (2007).
- Bursting the holiday shopping model with Cyber Monday. U.S. E-retail sales reached $9.3B (2016 Thanksgiving Day to the following Sunday); increasing 16+% compared to same period last year.
- Technology innovation initiatives including robots, delivery by drone, Internet of Things Dash and of course the newest item … Alexa (amazing!).
As the retailing industry is morphing and re-engineering itself, so what can Amazon do next? It has attempted the Amazon Go initiative (read previous post). They have also announced a mall pop-up stores concept. All while brick-and-mortar retailers (Target, Wal-Mart, Best Buy) are targeting (sorry for the pun) Amazon with their online and traditional channels.
How about acquiring a cable shopping network! Stunned? You may ask … A cable network? Why?
Extending Its Reach. Really? It’s difficult to believe that Amazon’s reach into our homes, lives and purchasing behavior can be more than it is. But consider … home shopping networks reach approximately 80-90M homes. Not sure how many viewers the shopping networks receive daily. Or how many website visits Amazon receives daily. But without question, it would increase the reach of Amazon to potentially new viewers.
Infomercial Dreaming. Amazon has been successful to integrate many promotional techniques into their website; specifically adding videos to many product profiles in their online database. Some products require videos to understand their functionality, installation and use … remember a picture is still worth a thousand words!
The “As Seen On TV” phenomena created the Flowbee, the Chia Pet, and Ginsu knives. Now Amazon could leverage the power of demonstration to sell its products in a manner that is does not possess … 24-hour promotional infomercials.
Economies of Scale. The two predominant networks have a supply chain, warehouses, buyers, customer service and suppliers. While highly controversial, either network can gain significant operational efficiency through Amazon’s vast infrastructure … technology, software, logistics and purchasing power.
It is also very plausible that the shopping networks also have strategic techniques (maybe direct drop ship to customer) that Amazon can leverage. Many viewers that are loyal customers/advocates of the home shopping networks could be converted to Amazon as customers through its model (Amazon Prime, Kindle, etc.).
Conclusion. Is it plausible? Or would the major home shopping networks would even consider “selling out” to Amazon. Hmm … what if there is a barrel of money attached?
But an interesting change to the traditional (brick and mortar) and the online retailing model. Another retail model transformation.
Or did this idea roll around in my head too long?
What do you think?