Amazon is threatening these 10 industries

Amazon is famous for its aggressive growth.

caption
Amazon is famous for its aggressive growth.
source
Drew Angerer / Getty Images

  • Amazon never stands still, and it tends to make both investors and executives of other companies nervous.
  • The latest example is Amazon apparently moving into the pharmacy sector with the purchase of online pharmacy PillPack. Pharmacy stocks dropped on the news.
  • These are the industries that have been most impacted by Amazon’s aggressive expansion.

Amazon is not a company that is about to sit still – it’s always eyeing up its next target.

On Thursday, it announced its intent to purchase PillPack, an online pharmacy. It’s the latest in what is turning out to be a heavy push into healthcare for the retail giant. In January, the company announced a collaboration with JPMorgan and Berkshire Hathaway meant to reduce healthcare costs for US workers.

Amazon has a tendency to make other companies nervous with its bold moves, and investors tend to get a bit weak in the knees when Amazon seems to be targeting the sector their company operates in. On news of the PillPack purchase, pharmacy stocks like CVS, Rite Aid, and Walgreens Boots Alliance dropped.

Amazon is known for its aggressive growth and when it thrives, other companies suffer.

These are 10 industries that Amazon is threatening:


Electronics retailers

source
Reuters/Shannon Stapleton

While Best Buy has been under siege by Amazon for years, the electronics retailer long had one advantage: the Geek Squad of employees ready to help customers with technical difficulties.

However, in July 2017, Amazon started rolling out a sort of Geek Squad of its own, in the form of Smart Home Consultations.

Best Buy hasn’t stood still, however, and it recently launched its own upgraded subscription version of Geek Squad, which offers unlimited tech support for $200 a year for all devices and appliances.


Consumable manufacturers

source
Flickr / Danny Mckiernan

The future of batteries may be online – and that’s bad news for companies like Energizer.

While online sales of batteries only make up roughly 5% of total battery sales today, UBS said in a note last year that it expects that figure to rise to 17% by 2025. With Amazon making up roughly 90% of online battery sales and its own private-label battery brand, it could create some major complications for Energizer.


Department stores

source
Drew Angerer/ Getty

Macy’s and other department stores, such as JCPenney, are facing off against Amazon – and coming up short.

“Internet retailers (led by Amazon) have added $27.8 billion to their apparel revenue since 2005, while dept stores have lost $29.6 billion,” Morgan Stanley analysts wrote in a 2016 note. “This share loss appears at risk of accelerating given 1) Amazon’s bigger push into fashion, and 2) consumer willingness/acceptance to shop fashion through Amazon.”

Launching the Prime Wardrobe service in June was “another nail into the department store coffin,” Wells Fargo analyst Ike Boruchow wrote in a note to clients.


High-end department stores

source
Business Insider/Mary Hanbury

Nordstrom is another traditional retailer getting hit hard by Amazon’s online dominance.

“Amazon knows more about the consumer than they do,” CNBC’s Jim Cramer wrote after Nordstrom reported another disappointing quarter in May. “They – the best out there – are still doing guesswork, with one brick-and-mortar hand tied behind their backs.”

And in October, Scott Galloway, a professor of marketing at NYU Stern School of Business who correctly predicted the company would buy Whole Foods, said Amazon may buy Nordstrom next.


Food delivery businesses

In September, Amazon partnered with Olo, an online ordering company, to help it ramp up its food delivery service and take on GrubHub, the parent company of Seamless.


Bookstores

source
Mike Segar/Reuters

The Barnes & Noble versus Amazon battle has been going on for years. However, the discrepancy between the two has been especially grim recently.

Barnes & Noble reported in January that sales dropped 6.4% during the holiday season. E-commerce sales also suffered during the critical period, dropping 4.5%.

Amazon has also grown its physical bookstore presence.


Grocery stores

source
Scott Olson/Getty Images

Amazon bought Whole Foods in August 2017, which dealt a massive blow to US grocery stores as it forced its way into the brick-and-mortar market and threatened to drive prices down.

The retailer is already the largest seller of groceries online. It’s estimated to have 18% of the US online grocery market, which is double the second-place share held by Walmart.

By having access to brick-and-mortar locations, the company is able to expand its reach across the US and use these stores as distribution centers for online orders.


Healthcare companies

source
Thompson Reuters

Amazon’s latest venture with Warren Buffett’s Berkshire Hathaway and JPMorgan Chase & Co threatens to have a big impact on the US healthcare market.

The three companies are looking at ways to offer more affordable healthcare for employees and their families using technology solutions, Reuters reported.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” Berkshire Hathaway Chairman and CEO, Warren Buffett said, according to Reuters. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.”


Pharmacy

source
iviewfinder/Shutterstock

On Thursday, Amazon announced its intent to purchase PillPack, an online pharmacy. It’s the latest in what is turning out to be a heavy push into healthcare for the retail giant.

Pharmacy stocks like CVS, Rite Aid, and Walgreens Boots Alliance dropped on the news.


Package delivery and logistics

It’s no secret Amazon wants to make it cheaper to deliver packages. It’s already invested in a fleet of planes to cut the distance needed to send packages, and developed its own last-mile delivery apparatus called Amazon Logistics. UPS and FedEx stocks had previously fallen on the news that Amazon would be heading into shipping.

Now, it’s looking for more partner companies to start up and help it deliver packages.