Tag: Amazon

By Jason Del Rey for Recode

With a stock price that has increased 135% over the last five years, Home Depot remains one of the few giant brick-and-mortar retailers to find success in the age of Amazon.

Now, the $200 billion home improvement retailer is going on the biggest technology hiring spree in its history to try to maintain that edge.

Home Depot plans to add more than 1 000 new hires to its technology teams in 2018, the company will announce on Wednesday, to support an $11 billion multi-year investment plan to extend its lead in brick-and-mortar retail over competitors like Lowe’s and fend off increased competition from Amazon and other online players. The company has approximately 2,800 employees in technology roles today.

The hires will span roles such as software engineering, user experience design, network engineering and product management, and be located predominately in the company’s Atlanta, Austin and Dallas technology offices, the company said.

They mark the onset of an $11.1 billion strategic plan, first announced in December, designed to improve Home Depot’s online shopping experience, expand its warehouse footprint to speed up deliveries, and make improvements to its stores to help customers find items quicker and check out faster. Recode reported in December that Home Depot had weighed an acquisition bid for the $9 billion logistics company XPO to beef up its shipping and delivery capabilities.

Matt Carey, Home Depot’s chief information officer, acknowledged in an interview that the hiring numbers might not compare to those of the leader in U.S. online retail, Amazon. But they mark an increase of more than a third for Home Depot’s technology staff, and Carey said he’s confident the company’s current plan is a differentiated one.

“I don’t run their roadmap; I run my roadmap,” he said of Amazon in an interview with Recode. “The roadmap we have is one our customers are encouraging us to go execute on. I’m not limited by anything other than time right now.”

By Nikki Schwab for DailyMail

President Trump is to have dinner with his biggest Silicon Valley backer, Peter Thiel, DailyMail.com has confirmed.

The dinner, a source close to Thiel said, will be a strategy session on how the president might be able to regulate Amazon, Facebook, Apple and Google.

Trump has been fixated on Amazon as of late, blasting the online retailer again from the White House on Tuesday.

President Trump is expected to get advice from billionaire Peter Thiel on how to regulate the top tech companies that include Amazon, Facebook, Google and Apple.

“Amazon’s gonna have to pay much more money to the Post Office. There’s no doubt about that.”

Trump charged the U.S. Post Office is “losing billions of dollars” all because it delivers packages for Amazon at below cost “and that’s not fair”.

Behind-the-scenes, a source told Axios that Trump is “obsessed with Amazon”.

“He’s wondered aloud if there may be any way to go after Amazon with antitrust or competition law,” a source told the publication.

Axios pointed out that the president ‘would love to clip CEO Jeff Bezos’ wings,’ but he doesn’t have a plan to do so. With billionaire Thiel’s advice, that could change.

Amazon is planning to offer a credit card to U.S. small-business customers, furthering its push to supply companies with everything from reams of paper to factory parts, according to people with knowledge of the matter.

The e-commerce giant has been in talks with banks including JPMorgan Chase on a co-branded credit card for small-business owners who shop on its website, said the people, who asked not to be named discussing private negotiations. An Amazon spokesman declined to comment.

Seattle-based Amazon (AMZN, -0.68%), the world’s largest online retailer, has been looking for a way to replicate in the workplace the success that’s made it a go-to shopping destination for households. In October, the company launched a Prime membership program offering fast free delivery for businesses, which was seen as a way to grab market share from factory-equipment providers such as WW Grainger and Fastenal and office-supply stores like Staples (SPLS, +0.00%) and Office Depot (ODP, -3.53%).

Amazon is hoping the new credit card, which will feature rewards points for purchases, will also let it eventually add offerings such as business insurance through a portal designed for its small-business customers, according to one of the people familiar with the matter. Amazon could use customers’ transaction data to help tailor the rewards, this person said. The retailer has already lent $3 billion to more than 20,000 small businesses that sell via its marketplace in the U.S., U.K. and Japan, Amazon said last year.

Warring banks
The battle for small businesses’ spending has also been heating up among U.S. card issuers such as JPMorgan and American Express. Over the past few years, those lenders have debuted retooled proprietary small-business cards as well as new co-branded offerings for such customers.

A representative for JPMorgan (JPM, -1.24%) declined to comment.

AmEx (AXP, -2.33%) says it is the top card issuer for U.S. small businesses and that its portfolio is larger than its five nearest competitors combined, according to a presentation last week. The New York-based company doesn’t disclose total purchase volume for the category. In 2016, small businesses spent about $72.9 billion a year on JPMorgan’s credit cards, $46.7 billion on Capital One Financial’s and $15.6 billion on Citigroup’s, according to a June 2017 edition of the Nilson Report.

AmEx shares slipped on the news, declining 1.4% to $97.67 at the close of trading on Monday. The report also rattled stocks of AmEx credit-card rival Discover Financial Services and Amazon supply-chain competitors Grainger and Fastenal.

Amazon already offers two credit cards for consumers with JPMorgan and Synchrony Financial. Those cards come with as much as 5% cash back on purchases. The retailer is also in talks with JPMorgan and Capital One about a product similar to a checking account that could help it lower the amount it spends on card fees every year.

Source: Bloomberg / Fortune

Spat between Google and Amazon heats up

A tit for tat between the two tech giants just reached a new level, with Google announcing Wednesday it is restricting YouTube access on Amazon products, since Amazon doesn’t sell Google’s products.

Both companies sell rival television streaming devices and voice-activated speakers — and one of the big selling features of its Echo Show, which is equipped with a screen, was the ability to watch YouTube videos.

​“We’ve been trying to reach agreement with Amazon to give consumers access to each other’s products and services. But Amazon doesn’t carry Google products like Chromecast and Google Home, doesn’t make Prime Video available for Google Cast users, and last month stopped selling some of Nest’s latest products,” a statement from Google said. “Given this lack of reciprocity, we are no longer supporting YouTube on Echo Show and FireTV. We hope we can reach an agreement to resolve these issues soon.”

So, for now, Amazon’s Echo Show and its Fire TV can only access YouTube via its existing website, not through the app.

“Google is setting a disappointing precedent by selectively blocking customer access to an open website,” said Amazon said in a statement. “We hope to resolve this with Google as soon as possible.”

Amazon users have been greeted with a message letting them know they won’t be able to access YouTube on their devices, effective Jan. 1, 2018.

By Alyssa Newcomb for NBC News

Amazon looks to access consumers’ houses

Amazon has announced Amazon Key, a lock and camera system that users control remotely to let delivery associates slip goods into their houses.

Customers can create temporary passcodes for friends and other services professionals to enter as well.

The move may help Amazon capture sales from shoppers who can’t make it home to receive an order in person, and don’t want the package stolen from their doorstep.

Amazon has announced Amazon Key, a lock and camera system that users control remotely to let delivery associates slip goods into their houses.

Amazon Prime members can pay $249.99 (£190) and up for a cloud-controlled camera and lock that the company offers to install.

Delivery associates are told to ring a doorbell or knock when they arrive at someone’s house.

If no one greets them, they press ‘unlock’ in a mobile app, and Amazon checks its systems in an instant to make sure the right associate and package are present.

The camera then streams video to the customer who remotely can watch the in-home delivery take place.

The associate cannot proceed with other trips until the home is again locked.

It is unclear if such protections will persuade customers that the service is safe to use.

‘This is not an experiment for us,’ said Peter Larsen, Amazon vice president of delivery technology, in an interview.

‘This is a core part of the Amazon shopping experience from this point forward.’

Members of Amazon’s Prime shopping club can pay $249.99 (£190) and up for a cloud-controlled camera and lock that the company offers to install.

Delivery associates are told to ring a doorbell or knock when they arrive at someone’s house.

If no one greets them, they press ‘unlock’ in a mobile app, and Amazon checks its systems in an instant to make sure the right associate and package are present.

The camera then streams video to the customer who remotely can watch the in-home delivery take place.

The associate cannot proceed with other trips until the home is again locked.

It is unclear if such protections will persuade customers that the service is safe to use.

He added that if a problem arises, ‘You can call customer service, file a claim and Amazon will work with you to make sure it’s right,’ reimbursing customers in some cases.

Amazon’s new service goes live on 8 November in 37 US locations, and it is unclear if it will be introduced in other countries in the future. Wal-Mart Stores, Amazon’s biggest retail rival, has similar plans.

It said last month it would test delivering grocery items ‘straight into your fridge’ with August Home, a smart lock business that Assa Abloy AB said it will acquire.

By Shivali Best for Daily Mail 

Retailers across America have been closing stores in droves this year amid years of declines in sales and customer traffic and an increasing threat from Amazon.

So far in 2017, retailers have shut down more than 6,300 stores. UBS says the sneaker retailers Foot Locker and Finish Line could be the next to start closing stores.

UBS’ findings come following Friday’s dismal second-quarter results from Foot Locker that caused shares to plummet by nearly 30%. The company announced earnings of $0.39 a share on revenue of $1.7 billion, both of which were shy of Wall Street expectations. Additionally, same-store sales sank 6% versus a year ago. Foot Locker shares have plunged 57% over the past three months.

On Foot Locker’s quarterly conference call, chairman and CEO Richard Johnson said he wasn’t worried about Amazon. Here’s Johnson (emphasis ours):

“For our part, we will continue to invest in creating compelling experiences for our customers. At the premium end of the market, most of our customers don’t want to just buy a specific product they see on a screen. They want that product to have a connection to an experience they find meaningful and want to participate in. That experience could be a special event in a store, being notified of or discovering a video on our website or YouTube channel of an athlete or celebrity wearing or discussing the latest product, an interaction with their friends while touching and feeling the product, or simply a conversation about sneakers with one of our stripers or other store associates. For that reason, we do not believe our vendors selling product directly on Amazon is an imminent threat. There is no indication that any of our vendors intend to sell premium athletic product, $100-plus sneakers that we offer, directly via that sort of distribution channel.”

But in a note sent to clients on Monday, UBS analyst Michael Binetti downgraded both Foot Locker and Finish Line and said it’s “almost certain” that the sneaker retailers would lose market share to Amazon. He lays out three reasons he thinks things are about to get a lot tougher for the industry.

First, Binetti sees Nike stepping up its efforts to push sales directly to the consumer. That is especially worrying for Finish Line, which, according to Nike’s October 25 analyst day, sees 68% of its sales come from Nike. Binetti adds, “For Foot Locker in particular, while many of its stores are among the most compelling retail experiences in our US specialty coverage group, we think the company will have to significantly accelerate closure of its lower tier stores to properly absorb market share shifts to the brands own DTC businesses (and to Amazon).”

But the sneaker retailers’ problems don’t stop there. It appears consumers are now choosing to buy their Nikes on Amazon versus going into brick-and-mortar stores like Foot Locker and Finish Line. “UBS Evidence Lab survey shows that in ’17 for the 1st time, more consumers prefer to buy Nike on AMZN vs at FL,” Binetti wrote.

There was a “significant YOY increase in the percent of consumers who prefer to buy Nike product ‘on the brand’s own website,'” Binetti notes. “The combination of an accelerating shift of purchase to both Amazon and the brands’ own website — and the subsequent reduction in purchase intent through athletic specialty retailers like Foot Locker — makes it hard to see the path back to accelerating market share gains for Foot Locker.”

Finally, both Foot Locker and Finish Line have a large presence in malls that have lost the anchors Macy’s and J.C. Penney.
Specifically, Binetti says, “We think FINL is at particular risk (more so than FL anyway) of further deterioration in sales & traffic trends in its stores due to high exposure to lower-tier locations.”

As a result, UBS downgraded Foot Locker from “buy” to “neutral” and Finish Line from “neutral” to “sell.”

By Jonathan Garber for www.businessinsider.com

The Federal Trade Commission is reportedly looking into whether Amazon’s discounts are as good as they seem.

As part of the FTC’s review of Amazon’sagreement to buy Whole Foods, the Federal Trade Commission is looking into allegations that Amazon misleads customers about its pricing discounts, Reuters reports, citing a source close to the probe.

The probe is based on a complaint from the advocacy group Consumer Watchdog, Reuters said. The FTC had no comment, saying as a rule it doesn’t confirm the existence of investigations. Consumer Watchdog earlier this month published a report claiming the online retailer “routinely uses inflated and fictitious previous prices to give consumers the misleading impression they’re getting a bargain.”

Amazon refuted the group’s pricing report.

“The study issued by Consumer Watchdog is deeply flawed, based on incomplete data and improper assumptions,” it said in a statement. “The conclusions the Consumer Watchdog group reached are flat out wrong. We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”

Consumer Watchdog, which analyzed 1,000 items sold on Amazon, said the retailer often employs “previous” prices, which it alleges are designed to give the appearance of big discounts. Consumer Watchdog said the “previous” prices appear to replace Amazon’s “list price,” which earlier this year came under fire for allegedly failing to reflect the actual market price of an item.

“Amazon displayed reference prices on 46 percent of the products surveyed—a sharp increase from a similar sample taken just months before,” Consumer Watchdog said in its report. “They now employ several different kinds of reference price, including “was” prices, “sale” prices, or simply prices with a line through them (“strikethrough prices”).”

The report also alleges Amazon boosted the reference prices to about 70 percent higher than the historical price of the item.

In one example, Amazon said the before-sale price on a pack of LED light bulbs was almost $100, but offered the pack on sale for $14.99, showing that customers would receive an $85 savings. However, Consumer Watchdog said the site hadn’t charged more than $14.99 for the lightbulbs in the previous 90 days.

“Amazon appears to be increasing its use of reference prices on its site since last year, when it quietly eliminated many list prices,” the report said. “However, the result is the same: Amazon’s customers are being deceived into thinking they are getting a bargain, when in most cases they are not.”

Consumer Watchdog said it believes the Whole Foods acquisition should be blocked unless Amazon changes its pricing strategies.

By Aimee Picchi for CBS News

Amazon has sent shockwaves through the food retailing business with its near $14-billion acquisition of natural and organic food chain Whole Foods.

The move has dominated the financial news over the past three days and has been called a game-changer for the food retailing industry, but could there be wider ramifications for the business supplies industry? We suggest a few things to think about…

Whole Foods locations could be used as collection points for Amazon online sales, providing customers with more delivery options.

Whole Foods stores could act as local distribution hubs for fast delivery, two hours or even less, and give Amazon a stronger last-mile delivery presence.

Amazon’s move could have a disruptive effect on the wider food retailing industry. There is already speculation about the need for accelerated consolidation in the mass and grocery sector, and if that happened that would affect vendors that sell into these retailers.

Amazon has been testing more consumer-friendly retail concepts, such as its Amazon Go initiative where customers just pick items off shelves without the need to go through a checkout. Acquiring Whole Foods will give it a wider test platform and could lead to faster adoption of some of these shopping innovations as well as speeding up digital transformation in the retail sector in general.

We have previously downplayed the idea of Amazon acquiring retail locations in the business supplies channel because there was no indication that it would make a significant move into the retail space. That has now changed, and the Whole Foods deal validates Amazon’s belief in an omnichannel experience that combines the digital and physical worlds.

Could this mean that Amazon now looks to acquire retailers in other business segments, such as office supplies, and that Staples or Office Depot’s stores could be on the Amazon radar? Possibly, especially if Amazon is not happy with the way that Amazon Business is growing; it hasn’t updated its customer and sales figures on Amazon Business in the US since April 2016. Is that because the growth rate has slowed and it’s not getting the traction it thought it would after Amazon Business’ initial success?

The Whole Foods acquisition is reportedly being driven by difficulties Amazon was having in growing its Amazon Fresh grocery delivery business. If Amazon Business is stalling or not growing fast enough, then why wouldn’t Amazon look at buying growth? We now know that this strategy is part of Amazon’s playbook.

By Andy Braithwaite for OPI.net

 

When you need to buy a new kitchen gadget, a designer lipstick, a branded razor, a calendar and that vital cable for your television — what’s the one easy place you can turn to?

That’s right, there isn’t one in Australia. You’re facing hours going shop-to-shop, picking up second-rate products from a local mall or ordering from various websites with delivery fees on each item and mixed rules on returns.
Amazon is the game-changer our retail landscape needs, one that transformed shopping in the UK and US years ago. Despite the hand-wringing from the retail sector that has dominated reporting on the online giant, this is mostly good news for the consumer.
You will be able to buy what you want, when you want it. It will typically be affordable. Existing brands will have to work harder to compete. It will be the arrival of Uber, or Aldi, all over again.

I lived in the UK more than four years ago, and buying books, travel accessories and homeware couldn’t have been easier. Every Christmas now, I log on to Amazon and select the perfect toiletries, chocolates, booze, games, DVDs, hiking gear and toys that I want for all of my relatives, adding wrapping and a message where needed. It’s the work of minutes.
In the four years I’ve been in Australia, waiting for Amazon, the company has grown enormously, and it’s in fashion that investment bank Morgan Stanley now sees the biggest threat.

Its report “The Amazon Effect in Australia” says $800-million will be wiped from the earnings of chains including JB Hi-Fi and Harvey Norman, but the single biggest impact will be on Wesfarmers. The nation’s largest retailer, which owns Target and Kmart, could lose more than $428 million in earnings by 2026.
The report said department stores would be the sector worst hit, as Amazon generates up to $12 billion in sales by 2026.

Online retailer Catch Group this week announced it is having a makeover to ensure it becomes number two in Australia after Amazon, rebranding Catch of the Day as Catch.com.au and turning it into a marketplace.
Amazon Fresh will take on the grocery sector, and it is aggressively building its Amazon Prime video membership service, making inroads into streaming and refusing to stock Apple products in favour of its Fire TV sticks. Amazon entered the Artificial Intelligence field in 2014 with its Alexa speaker. This week it emerged that its shares (and those of Google) have just reached $US1000, putting them in an elite club of mega-companies.

In December, it opened the first Amazon Go store at its Seattle headquarters, a convenience store with a tracking system of sensors, algorithms, and cameras instead of cashiers or checkout lines.

Australians haven’t migrated to online shopping in the landslide once predicted. Figures released by the National Australia Bank last week showed the Online Retail Sales Index — a measure of spending on retail goods — fell by 0.8 per cent in April. But even if you prefer to visit a store and try clothes on, it’s being able to get those small essentials without the painful search that will hook you in.

And Amazon is moving offline, too. In December, it opened a prototype Amazon Go grocery store at its headquarters in Seattle, Washington, which uses a tracking system of sensors, algorithms, and cameras instead of cashiers or checkout lines. The eCommerce giant opened its first physical bookstore in New York last month — its seventh in the US. Amazon Books, like the Go store, does not accept cash, with Prime members using the app on their smartphone to pay and non-members using a credit or debit card.

Maxim Group today predicted a future in which Amazon will run everything from petrol stations to credit lines, Dow Jones reports.

“Consumers will be able to save money at the Amazon gas station because they belong to Amazon Prime, much like Costco members today,” said Maxim’s Tom Forte. “They will also be able to pick up and return their merchandise ordered online at the Amazon gas station.”

They’ll book their travel on Amazon, and have the firm send their suntan lotion ahead to the resort so it’s there when they arrive, he added.

But just as with Uber and co, there are serious questions over Amazon’s omnipotence. Critics say the retailer has a monopoly and is destroying small businesses — book stores, boutiques, grocery stores. There are also questions over how it pays tax.
There have been regular accusations that the company mistreats workers, with reports in December of “intolerable conditions” at a Scottish warehouse, with badly paid staff forced to sleep outside in tents to save on commuting costs.

A Sunday Times investigation found temporary workers at the warehouse were being penalised for taking sick leave and put under immense pressure to hit targets, and that water dispensers were often empty despite the intense physical nature of the job. Unions said workers were falling ill from overwork.

In the US, where Walmart is buying up smaller online retailers as it battles to compete with Amazon, there have been dozens of stories about inhumane conditions at its warehouses. But workers who spoke to Mental Floss in 2015 said conditions were relatively typical for warehouse work. In 2012, after an expose on the searingly hot summertime conditions, Amazon announced plans to spend $52 million to install airconditioning.
The company is now recruiting for hundreds of jobs in Australia as it prepares for its highly anticipated debut. It has broadly positive reviews on job sites Indeed and Seek, although there were complaints about difficult management, tough targets and short lunch breaks.

Amazon is a massive tech corporation and — mirroring Facebook, Apple and Google — there are justified concerns over its practices and treatment of employees as it grows.
However, it is time Australia caught up with the rest of the Western world and actually knew what those were.

By Emma Reynolds for www.news.com.au

Is Amazon under-valued?

Amazon is one of the largest companies in the world, but its valuation leaves plenty of room for growth. The stock’s valuation multiples don’t do justice to the growth prospects of this e-commerce giant.

Amazon experiences 27% year-on-year sales growth and this growth profile is simply too good for a company trading at only 3,2-times revenue.

Relatively weak operating margins have long been a roadblock for Amazon. But massive growth in both sales and margins in Amazon Web Services (AWS), as well as the growing dominance of Amazon Prime in the US, mitigate such concerns and make a strong case for undervaluation in the equity.

Amazon’s international segment currently operates at negative operating margins. However, the trend looks set to reverse as Amazon Prime penetrate these markets.

Future growth

Amazon’s primary top-line growth factors are international expansion and Amazon Web Services. AWS will improve overall margins, but international expansion is still in a negative margin situation. The trends have exacerbated in 2016.

In the full year 2016, North America represented almost 60 percent of total revenue while international and AWS represented roughly 30% and 10%, respectively. There is room for growth here, and it isn’t unreasonable to expect Amazon to be able to replicate North American success in other developed regions of the globe.

Source: www.seekingalpha.com

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