from Hacker News

Amazon Strategy Teardown

by asanwal on 4/21/17, 5:53 PM with 98 comments

  • by dkrich on 4/21/17, 8:15 PM

    I continue to be bearish on Amazon long-term. The notion that shoppers will one day buy things simply with the push of a button or saying "Alexa, get me some paper towels" seems extremely far-fetched to me. Most shoppers are extremely price-sensitive and won't buy things before researching the price, save possibly for a few low-price staples like toilet paper or soap. So this idea that Amazon keeps suggesting where people are shopping with just their voices, seems DOA. But even if people do prefer convenience over price, there's no money in delivering groceries to people. Groceries are notoriously low-margin, one of the lowest margin businesses there is, so delivering groceries to people doesn't seem like it's going to make Amazon the trillion-dollar company some people think it will eventually become.

    Looking forward, 10-20 years, maybe the delivery cost issue will be solved with self-driving vehicles and robotic deliveries. But then, why would Amazon be the sole beneficiary of that development and not every grocery store? Sure, they have distribution facilities, but so does every major grocery and retail chain.

    As for AWS, I'm not real high on that side of the business, either. Despite being the runaway leader in cloud service, they make very little money in it so I'm not very confident that their margins will increase as competition from Microsoft and Google only intensifies.

    I'm not at all suggesting that Amazon is going away, and what they've done to this point is nothing short of extraordinary. I just think long term that they will settle in as a large American retailer that reshaped the retail landscape for other stores that will eventually catch up.

  • by deepnotderp on 4/21/17, 6:31 PM

    This article mentions that AI as a service (aka machine learning, OK, let's be honest, Deep Learning) will be a major pillar of their business in the future. However, the chances that they will be able to beat Google seems vanishingly small.

    EDIT: to justify why, let me make these points: Google has more machine learning relevant data.

    It has a strong brand image as "THE company for AI "

    It has (at this point in time at least) better machine learning hardware. This will change in the near future, but Google is far more likely to take a competitor in this area seriously and acquire them.

    Google has not one, but two (Deep mind and brain) world class research labs.

    Google's ML APIs are objectively better.

  • by rrggrr on 4/21/17, 7:01 PM

    I can't see how Oracle and IBM can compete long-term against the breadth of IT infrastructure Amazon has built. I can't see how Walmart and Target can compete with the distribution network and frictionless transactional model Amazon has developed. I'm not sure any company has the same depth of real-world data for training AI systems... 300 million users "liking" with their wallets and not a simple mouse click for example.

    Its been 127 years since the Sherman anti-trust act was passed. Its probably time for a serious re-think.

  • by amelius on 4/21/17, 8:16 PM

    I'm wondering why Google doesn't extend the functionality of their "shop" button (it's right above the search bar), to compete directly with Amazon's 3rdparty retail strategy (?)

  • by faragon on 4/22/17, 9:16 AM

    "Hey Alexa, compute my weekly food/things purchase with optimized cost alternatives"...

    In my opinion, Amazon will be huge, and it is just starting. What worries me the most is that they will have no competition.

    Amazon is "killing" many small (and big) businesses because their customer service is excellent. Times when the shop make you felt like a criminal when returning defective stuff are gone, for good. And now, those small (or big) business are improving customer service. So the customer win.

  • by justicezyx on 4/21/17, 7:47 PM

    AI is the pillar for almost everything in the future. AI is the new Internet. I cannot get it why people are still analyzing that some big player is investing in AI...

  • by phoneyphone on 4/21/17, 11:26 PM

    MG Siegler wrote a more exciting version of this on Medium. I'd link to it but on mobile right now.