Tag: Amazon

By Abha Bhattarai for The Washington Post 

The city of Atlanta, Denver public schools and the Mesa, Ariz., police department are among the 1 500 public organisations that since last year have signed new contracts to buy office supplies, books, even musical instruments directly from Amazon, according to a report released Tuesday by the Institute for Local Self-Reliance, a nonprofit group that advocates for strong local economies.

The contracts with Amazon could drive billions of dollars in public spending to the online giant in coming years, propelled in part by the ease of purchasing online — but which, like in consumer retail, risk penalizing independent retailers.

The local deals are part of a larger contract Amazon signed in January 2017 with U.S. Communities, a purchasing cooperative that negotiates contracts with suppliers on behalf of its members, which include a number of municipalities and government agencies. The five-year contract, which can be renewed for up to 11 years, is valued at $500 million a year.

The U.S. Communities contract was last held by Independent Stationers, a group of independent suppliers around the country. Amazon already sells to tens of thousands of local governments and agencies, according to Amazon spokeswoman Lori Torgerson.

“As public dollars shift to Amazon and away from local independent suppliers or even national chains with local stores, cities are undercutting their own local economies,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance and a co-author of the report. Mitchell says the new contracts also hurt national chains like Office Depot and Staples that have stores in some of the communities that also purchase from them.

Amazon, which pays local taxes where required, said its contract continues to support small businesses. “The competitively solicited contract helps education and public sector organizations purchase directly from the Amazon Business marketplace, which includes small, local and socioeconomically diverse businesses,” Torgerson said.

Christine Gilbert, a spokeswoman for U.S. Communities, added that the Amazon contract “supports supplier diversity” by allowing agencies to work with a range of businesses that sell items through Amazon’s marketplace. More than half of the site’s sales come from third-party merchants.

But the Institute for Local Self-Reliance says the contracts do not include price guarantees or volume discounts that are typical of public purchasing agreements, potentially putting cities and counties at risk of overpaying for basic supplies.

“What’s striking here is that Amazon won this contract without having to compete on price,” Mitchell said. “This contract deviates from the norm in significant ways that put local governments at risk for spending more and getting less.”

A spokeswoman for Amazon said the company was one of multiple suppliers that responded to a formal request for proposals for the U.S. Communities contract.

Guernsey, an office products company in Dulles, Va., has been selling janitorial supplies, office products and furniture to government agencies for more than 40 years. But recently, founder David Guernsey says, the company has struggled to compete with Amazon’s selection of tens of millions of items, compared with the 50 000 he sells on his site.

About a year and half ago, he began creating spreadsheets for his clients showing how his fixed prices compare with Amazon’s at a given moment. Most of the time, he said, his prices were lower.

“We’re bleeding business to Amazon,” Guernsey said. “There’s this perception that Amazon has everything and that it’s easy to use, but we’ve been providing next-day delivery for three decades. It’s not as if they’ve invented the wheel.”

Officials at Prince William County Public Schools in Northern Virginia say they plan to spend roughly $1.5 million on Amazon purchases this year. The site has become a “one-stop shop” for school administrators, who are already accustomed to making personal purchases through Amazon, said Anthony Crosby, the school district’s acting purchasing supervisor, who helped negotiate the contract on behalf of U.S. Communities.

“Before this contract, people were out here independently setting up Prime accounts and making purchases,” he said. “All this does is create a legal pathway for them to do so.”

Denver Public Schools spent $1.6 million on Amazon orders in 2016, while Salt Lake County in Utah; the city of Austin, and the Portland, Ore., school system each spent more than $500,000 on the site that year, according to the ILSR report.

Amazon has been aggressively building up its government business in recent years. It hired Anne Rung, who oversaw procurements for the Obama administration, to lead its public-sector division in 2016 and last year forged an agreement with the Department of Homeland Security that allows workers to make purchases directly from Amazon. Amazon spent $12.8 million lobbying the federal government last year, up from $11 million a year earlier, according to watchdog site OpenSecrets.org.

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 

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