Twenty-five years ago Jeff Bezos, an unknown entrepreneur, launched an online store he decided to call Amazon.
The American is thought to have picked the name because he considered the Amazon rain forest, which is home to the world’s largest river, to be huge, exotic and unique.
But back in 1994, in the early days of the world wide web, Amazon was a new online book seller – known only to the relatively small constituency of tech-savvy computer enthusiasts who then used the internet and entirely unrecognisable from the leviathan it was to become.
Amazon’s founder Jeff Bezos is said to have been inspired by the Amazon rain forest (above)
Fast-forward a quarter of a decade, and Amazon is a household name across much of the world, operating in the fashion, home, electricals, grocery, tech, media and medical markets, to name but a few.
It was the second company in history (after Apple) to achieve a market value of $1trillion, it is the largest book seller in the US, and also the biggest online marketplace in the world – generating an eye-watering $524billion in sales in 2018.
Amazon was the second company in history (after Apple) to achieve a market value of $1trillion
Amazon took a leap forwards with the roll-out its Prime subscription service in 2005, which allowed its 100 million members to enjoy next-day delivery on many of its products.
In 2012, Prime was expanded to include Video, a streaming service allowing access to a library of TV programmes and films, including some it produced itself.
It has facilitated much of the shift to online shopping that we’ve seen in the last two decades and met a rising demand for convenience and speed, moving recently into the grocery and household supplies market with its Fresh and Pantry services.
Nonetheless, Amazon still has stiff competition in most of the countries it operates. Roughly 90 per cent of the global retail industry remains offline in the form of physical stores, which Amazon has only just started to dip its toe in.
So as we mark its 25th anniversary, it’s an opportunity to reflect on what the conglomerate has its sights set on doing next, and how it may seek to do it.
What next for Amazon?
As mentioned, Amazon has started experimenting with physical stores. Its fledgling ‘Amazon Go’ stores seek to create a seamless shopping experience without queues or checkouts.
Although, with only 13 stores currently operating within the US, this project is still very much in its infancy.
Amazon currently has 13 Amazon Go stores
However, in 2017, the company did send shock waves through the supermarket sector when it bought Whole Foods, which has around 500 shops.
While there are only a handful of Whole Foods shops in the UK, analysts have long since suspected that Amazon might look to expand its physical footprint in the food sector here.
Amazon has already been linked with a variety of targets in the UK, including Morrisons, Waitrose and Ocado.
‘The opening of Amazon Go stores is inevitable and a broadening of its services and product assortment is also relentless: its shadow over the rest of the retail sector is set to lengthen significantly,’ predicts Bryan Roberts, director at global insight firm TCC Global.
But Patrick O’Brien, director of research at Global Data does not believe that Amazon will be concerned with a major acquisition of a UK supermarket quite yet.
He thinks Amazon will concentrate instead on the expansion of its own schemes, brand products and online marketplace.
‘An increasing proportion of the UK retail market will be sold through Marketplace, as the major retailers of tomorrow are today’s startups currently utilising Amazon’s full logistical infrastructure,’ O’Brien says.
Drones, robots and healthcare
Looking ahead, there is no sense of Amazon’s growth slowing. Only last week, it revealed it would be creating 2000 new jobs in the UK.
Amazon is opening more distribution centres in the UK – it already has 17 and employs nearly 30,000 people in UK
But the sort of employees they are looking for – engineers, software developers, data scientists and cloud and machine learning experts – betrays where the firm may be directing its ambitions next, specifically technological advancement.
Amazon could even become the next big name in healthcare, says O’Brien.
‘There is seemingly no area immune to Amazon disruption, and its acquisition of PillPack last year has major disruption potential for the pharmacy sector.’
PillPack is an online pharmacy that packages your medication and delivers to your door every month.
Earlier this year, Bloomberg revealed another of Amazon’s projects. For a number of years, Amazon is believed to have been working on a new smart robot for the home powered by artificial intelligence.
Jeff Bezos (above) founded Amazon in 1994 and has overseen its growth from a book seller
The robot is expected to provide companionship, help with household chores and solve complex problems.
In addition, we can expect to see the gradual roll out of delivery drones, which in June Amazon said were mere months away from official launch.
Last week, it emerged that Amazon is planning to put 3,236 broadband satellites into low orbit. The firm has filed an application with the US Federal Communications Commission.
The project would seek to provide internet coverage to most of the US and under-served parts of the world. Of course, it’s in Amazon’s interests for there to be worldwide internet access.
Back on the ground, 100 million Alexa-enabled devices have been sold since the launch of first generation echo. Amazon boasts of how it continues to improve Alexa’s artificial intelligence year-on-year.
The number of devices available with Alexa built in more than doubled to 150 between 2017 and 2018. The products range from headphones and laptops to cars and smart home devices, with a promise of more to come, according to Bezos in his latest letter to shareholders.
Amazon Alexa devices have become common place and are advancing all the time
It’s easy now to envisage a world in which Alexa controls every device in your home, from the dishwasher to the lock on your front door.
As Priya Abani director of Amazon Voice services said last year: ‘We basically envisage a world where Alexa is everywhere.’
As the artificial intelligence behind it becomes more advanced, Alexa could become a constant companion – one that understands you better than you understand yourself as it learns to ‘crack our human code’.
This will give Amazon, as its creator, more insight into its customers than any of its competitors.
Just 25 years on from the birth of Amazon the humble online book retailer, the company is already one of the most influential, and feared, on earth.
If its appetite to grow continues, and regulation fails to inhibit it, Amazon’s grip on the planet will tighten further.