Internet retailer Amazon claims to offer "Earth's Biggest Selection", a mammoth range of products which now goes far beyond books and music to include anything from automobile parts to groceries and from clothing to household furniture. The business is firmly established as the #1 internet retailer worldwide (though it faces increasingly strong competition from Chinese rivals operating mainly in Asia). No other company has done so much to establish the reliability and functionality of e-commerce. But Amazon also historically suffered from low profit margins, and rival companies tended to outpace it in earnings growth. That laggard performance appeared to change in 2007, helped along by the launch of the Kindle electronic reader. Huge subsequent investment in infrastructure and technology prompted another slump in profitability in the 2010s. However, the evolution of the Kindle device and its various offshoots, and the rapid evolution of the Prime membership club has seen the emergence of a new role for Amazon as an entertainment broadcaster and creator. At the same time, the group has made a renewed commitment to increasing its profit, not just its revenues, and the result has been a stellar increase in its stock valuation. It has also diversified aggressively, not least through a deal in 2017 to acquire bricks and mortar organic grocery retailer Whole Foods Market for almost $14bn.
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Adbrands Social Media 5th Nov 2018: "Can You Feel It?". Not willing to allow any significant lead to physical retailers, Amazon is quick out of the gates with its own Christmas campaign, once again from Lucky Generals. It's a bright and happy little film, reprising the singing boxes introduced by the same agency this time last year. Perhaps a bit of added humour, instead of just general good humour, would have been the cherry on top, as with Lucky Generals' splendid 'Alexa Loses Her Voice' Super Bowl spot. But judging by the number of alternative language versions all released at the same time, the challenge this time for the Generals was to find a concept that would work globally rather than just in the US.
Adbrands Weekly Update 1st Nov 2018: Technology stars Amazon, Alphabet and Facebook all posted strong profit growth in 3Q but suffered slowdowns in revenues, prompting further falls in their already beleaguered stock prices, which have been in steep decline over the past month following record highs in the summer. Amazon's $2.9bn profit was around 11 times the figure it reported for the year-ago quarter, and was the company's 4th consecutive $1bn-plus result. However the topline lift of 29% to almost $56.6bn was Amazon's weakest increase for more than a year, and less than analysts had been expecting. So too were the company's forecasts for the current holiday quarter. However, Amazon's ad revenue continues to grow exponentially, up over 120% year-on-year to around $2.5bn.
Adbrands Weekly Update 11th Oct 2018: Ads Of The Week: "Great Shows Stay With You". It doesn't really matter if you haven't seen any of the Amazon-commissioned shows featured in this excellent new four-ad campaign from Droga5 London for Prime Video. You'll get the idea soon enough: the great shows you watch stay with you for the rest of the day, with surprising - or sometimes alarming - results. Here's the one for warrior women adventure 'Vikings', but we'd recommend you check out the others as well for 'Outlander', 'Lucifer' and 'Tom Clancy's Jack Ryan'. None so far for 'The Amazing Mrs Maisel' (the only Prime series we've seen all the way through), but we're guessing it's on its way and will be just as good.
Adbrands Weekly Update 6th Sep 2018: Room for one more inside! Amazon briefly joined Apple in the trillionnaires' enclosure this week. Its share price topped $2,050 on Tuesday, making it only the second US company in history to exceed a market cap of $1 trillion. That represented a 100% increase in less than a year. However, almost as if scared by its own success, the stock immediately dipped back down again below that magic level. Yesterday, the stock was trading below $2,000 a share. It's only a matter of time, though, before Amazon achieves that valuation on a permanent basis.
Adbrands Weekly Update 2nd Aug 2018: Amazon shrugged off the challenges which are facing some other technology groups (Facebook, Twitter, Netflix and others have all experienced declines in growth in recent weeks) to report quarterly profits in excess of $2bn for the first time. Earnings of $2.53bn for 2Q compared to just $157m in the year ago quarter; however, revenues of $52.9bn - up 39% year-on-year - were slightly below the level analysts were expecting. Some of the strongest growth is coming from the group's services businesses, not least the AWS cloud computing business where revenues soared by 49%. Advertising sales are also on a hot streak: revenues from the "other" division that mostly houses advertising doubled year-on-year to $2.2bn.
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Free for all users | see full profile for current activities: In the early 1990s, investment banker Jeff Bezos saw the possibilities of selling products to a mass market via the new and expanding internet, which seemed to offer a sales channel unfettered by the physical logistics involved in operating a retail outlet and managing inventory. He selected books as his commodity because they were comparatively fashion-free and offered a high profit margin per copy. He moved from New York to Seattle in 1994 to be near a big wholesale supplier, and launched Amazon.com the following July.
Even in those dark days of the internet, the site took off quite quickly, and by the end of the year, Amazon was selling more than 100 books a day. Embracing the communal nature of the web, the site encouraged buyers to submit reviews of the books they had purchased. While this surprised and angered some suppliers, it greatly enhanced Amazon's relationship with its customers. By the end of 1996, sales had risen to almost $16m, before rocketing to more than $140m a year later, encouraging the company to adopt the tag "Earth's Biggest Bookstore". The company floated in 1997, and in 1998 broadened its range with the addition of CDs and videos. Also that year, responding to plans by German group Bertelsmann to establish a rival book service in Europe, Amazon acquired two smaller rivals - Bookpages in the UK and ABC Bucherdienst in Germany - which rebranded as local versions of Amazon.
In 1999, toys, electronics, software, video games and home improvement joined the mix. That year sales raced through the billion-dollar barrier to hit $1.6bn, and Time magazine selected Bezos as its Person of the Year. The company also established outposts in France and Japan for the first time. But within just a year, Amazon was already beginning to attract detractors, who warned that the business was spreading itself too thinly. Investments in other online services such as pharmacy drugstore.com, delivery service kozmo.com and pet supplies outlet pets.com all proved write-offs. As if to cement Amazon's tarnished reputation, the group reported a massive $1.4bn loss for 2000.
Bezos launched a major restructuring in 2001, laying off 15% of its work force. The company also muscled into the territory of rival eBay, introducing person to person transactions via its ZShops third-party stores and auction services, as well as taking over the online operations of other companies struggling with their own e-commerce service, such as Target and Toys "R" Us. Those moves soon began to deliver results, and the group delivered its first modest quarterly profit at the end of 2001, and again in 2002. A year later the company reported its first two consecutive quarters of profit at the end of the year. In 2004, it established its seventh online portal with the acquisition of China's leading internet retailer, Joyo.com.
In early 2006 it began developing a music download service to compete directly with Apple's iTunes. According to press reports, the company was considering a subscription plan model broadly similar to that offered by mobile phone operators: users would subscribe to a dedicated Amazon download service and receive a custom-made music player as part of the offer, pre-loaded with a selection of promoted tracks which can then be swapped or updated online. By mid-year it became apparent that Amazon had abandoned the music service in face of the continuing dominance of Apple, but was instead preparing to launch a video download service. This arrived in September under the name Unbox. See full profile for current activities
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