Tag: Amazon

By Jason Karaian for Quartz

This week, Amazon founder Jeff Bezos saw his net worth soar above $150 billion, giving him the most billions among all the billionaires on the billionaire lists. Bill Gates, in second place, is worth a modest $94 billion, according to Forbes. Bezos first appeared on Forbes’ list in 1998, with a $1.6 billion fortune.

He made that much this week alone, on paper, as Amazon’s shares jumped in anticipation of “bigger than ever” sales on Prime Day, which ran from Monday to Tuesday. Amazon is now worth nearly $900 billion, and Bezos owns around 16% of the company’s shares. He became the world’s richest person earlier this year.

Although he is clearly doing pretty well for himself, a financial advisor might tell Bezos that he should consider diversifying his portfolio. It’s rarely wise to concentrate one’s wealth in a single asset, whether it’s a house or shares in a company you founded in a garage in the 1990s that now accounts for half of all e-commerce sales in the US.

So let’s say Bezos wanted to add some exposure to Europe. He’s familiar with Luxembourg—Amazon does a lot of business there. He could buy some stocks there. Or, actually, he could buy all the stocks in Luxembourg. Twice.

The Amazon founder’s vast wealth is enough to buy several countries’ stock markets outright. Currently, for example, he could purchase every company listed in Ireland, another popular place for tech firms, and still have a few billion dollars left over. Bezos may be better off, though, sticking with Amazon, which has gained more than 50% this year, adding around $50 billion—the total market cap of the Egyptian exchange—to the founder’s net worth.

By Tom Warren for The Verge

Microsoft and Walmart are teaming up for a strategic partnership that will take on rival Amazon in both technology and retail. Walmart is announcing today, at Microsoft’s Inspire partner conference, that it’s partnering with Microsoft to use the company’s cloud services. The five-year agreement will see Walmart use Azure and Microsoft 365 across the company, alongside new projects focused on machine learning, artificial intelligence, and data platforms.

Walmart is Amazon’s biggest retail competitor, and Microsoft is Amazon’s largest cloud services rival. That rivalry isn’t lost on Microsoft CEO Satya Nadella, who hinted in an interview with The Wall Street Journal that it’s “absolutely core to this” new partnership. “How do we get more leverage as two organisations that have depth and breadth and investment to be able to outrun our respective competition,” says Nadella.

While the tech partnership will obviously benefit both companies, it also comes just weeks after reports suggested Microsoft is working on rival Amazon Go technology for cashier-free stores. Microsoft is reportedly in talks with Walmart for this technology, and the software maker has hired a computer vision specialist from Amazon. Amazon’s Go store in Seattle uses multiple camera and sensors that use computer vision algorithms to detect what items you’re taking out of the store so you’re automatically charged. Microsoft is reportedly experimenting with attaching cameras to shopping carts to track items.

Both Walmart and Microsoft don’t reference too many of the future-facing parts of this strategic deal, and it’s mostly timed for Microsoft’s big partner conference in Las Vegas this week. However, this new deal could be a unique test ground for Microsoft’s bigger AI ambitions and any future plans it has to push other retailers to use its range of cloud services.

Source: eMarketer Retail 

When it comes to the US e-commerce market, Amazon is leaving the competition in the dust. This year, the online shopping juggernaut will capture 49.1% of the market, according to eMarketer’s latest forecast on the top 10 US e-commerce retailers, up from a 43.5% share last year. Amazon now controls nearly 5% of the total US retail market (online and offline).

Amazon will generate $258.22 billion in US retail e-commerce sales this year, up 29.2% over last year. Amazon’s Marketplace sales will represent an increasingly dominant portion of its e-commerce business—68.0% this year, compared with 32.0% for Amazon direct sales. By the end of 2018, sales generated from Amazon’s Marketplace will be more than double that of Amazon’s direct sales in the US.

“The continued growth of Amazon’s Marketplace makes sense on a number of levels,” eMarketer principal analyst Andrew Lipsman said. “More buyers transacting more often on Amazon will naturally attract third-party sellers. But because third-party transactions are also more profitable, Amazon has every incentive to make the process as seamless as possible for those selling on the platform.”

Computer and consumer electronics is the leading product category for Amazon, with sales of $65.82 billion in the US this year, representing more than a quarter of its retail e-commerce business.

In 2017, apparel and accessories surpassed books and music to become the second largest category. Apparel sales will grow more than 38% this year to reach $39.88 billion in the US. This category will represent 15.4% of Amazon’s e-commerce business, and 38.5% of all online apparel sales in the US.

But Amazon’s private-label push is being met with apprehension by several brands and retailers.

“While they are dependent on Amazon as a selling channel, they also recognize the threat to their brands should Amazon decide to compete by introducing its own private labels,” Lipsman said.

Other fast-growing categories for Amazon are food and beverage* and health, personal care and beauty. Food and beverage will grow more than 40% this year, while health and beauty will jump nearly 38%. Still, both categories represent just a small portion of Amazon’s US retail ecommerce sales.

“Amazon’s strategy for food and beverage is no different, in some respects, than it was for books—dominate the category,” eMarketer senior analyst Patricia Orsini said. “However, e-commerce in the grocery sector is a challenge. Share of online sales in this category is low because most people, for a host of reasons, prefer to buy food in brick-and-mortar stores. Amazon has an advantage because its shopper base is comfortable with shopping online. Along with insights gathered about Whole Foods shoppers, Amazon probably has the best chance of converting in-store grocery buyers to online grocery buyers.”

‘Big Four’ tech stocks slump

By Jasper Jolly for City A.M 

The US’s biggest technology stocks – Facebook, Amazon, Netflix and Google, collectively known as the Fangs – have fallen steeply as concerns over a trade war weighed on world indices.

The tech-heavy Nasdaq index fell by more than two per cent to its lowest close since the end of May.

Facebook and Amazon both lost over 2.5 per cent, while Netflix plummeted by more than six per cent. Apple and Alphabet, the parent company of Google, also fell heavily.

Equity indices around the world had earlier slumped, with France’s Cac 40 losing almost two per cent while Germany’s Dax gave up 2.46 per cent as investors feared further damaging trade moves.

American tech stocks have generally been immune to fears over protectionist trade tariffs, with no mention by either the US, China, or the EU of levies or other barriers to be imposed on them.

However, Russ Mould, investment director at trading platform AJ Bell, said the recent success of the Fang stocks – an acronym of the tech giants – in spite of market ructions may have made shares more vulnerable to bigger moves if sentiment shifts.

The Fangs may be “targets for some profit taking” if investors plump for cash amid fears of a broader market setback, he said.

The tech stocks are approaching similar levels of growth hit by the Nasdaq during the dotcom bubble at the turn of the century, which ended in a deep crash of more than 78 per cent, Mould said.

Over the course of 2018 a “Fangs+” index, which includes other large US-listed tech firms, has outpaced the gains of the bubble-era Nasdaq.

Yet the Fangs still face regulatory issues which could severely impact their business models, following the scandal over data misuse by political consultancy Cambridge Analytica, competition concerns, and ongoing tax issues.

“The danger for bulls is that these valuations leave little margin for error should something – anything – go wrong,” Mould added.

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

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