Amazon.com, Inc. (NASDAQ:AMZN) has captured the interest of unique consumers with the launch of a new section.
A few reports had suggested that AMZN was trying to position itself as “the next generation of gadget and consumer electronics companies can build their brands from the ground up.” Apparently, there was a lot of truth in that.
The e-commerce giant is catering to our rare and downright quirky tastes with the opening of its newest online addition, Amazon Exclusives, which officially went live on March 11.
Is it a game-changer that will pump billions of dollars of new revenue into Amazon? No. But it is another way for AMZN to set itself apart from its competitors.
Shoppers with a flair for original products and innovative technologies will undoubtedly appreciate merchandise like the Olloclip, a state-of-the-art optic lens designed for Apple Inc.’s (NASDAQ:AAPL) iPhone 6, and the LED turn-signal gloves, Zackees, for the safety-minded cyclist. Even Shark Tank fans can take a bite out of the action, with various products from the show’s featured inventors up for grabs.
So, how exclusive is Amazon Exclusives?
Well, AMZN is requiring existing and potential brands to become exclusive third-party retailers to sell their products through Amazon Exclusives. This means products will still be available through the brand’s personal websites, as well as their own brick-and-mortar locations.
Moreover, shipping from stores will be exclusively through AMZN with the option of Amazon Prime for qualified customers.
Although Amazon Exclusives’ products may not be literally “exclusive,” AMZN won’t be battling other retailers.
Competition in the Digital Market
Lately, the digital market space has been feeling a bit crowded.
Target recently lowered its free shipping purchase amount to $25 — $10 less than Amazon’s $35 free shipping minimum — on top of its continued efforts to become more prominent in the space by growing its digital presence.
In fiscal 2015, TGT plans to invest between $2 billion and $2.2 billion in capital projects, with $1 billion of that going towards digital. In turn, Target expects digital sales to spike by 40% this year. Meanwhile, Target also will be reducing its head count in the thousands of workers over the next two years, which is expected to create $2 billion in cost savings.
Refusing to be left behind, WMT will invest between $1.2 billion and $1.5 billion in e-commerce initiatives through fiscal 2016 to drive sales. Currently, WMT is working on offering a delivery service, next-day and same-day deliveries, and even grocery store pick-ups for orders placed online.
Small Focus, Big Goals
While AMZN may be targeting smaller companies through Amazon Exclusives, their colossal platform is the perfect place for up and comers to make their mark. Meanwhile, Amazon gets to capitalize on the growth of high-potential companies that are gaining in popularity.
Amazon Exclusives itself likely won’t play a huge role in the overall performance of Amazon stock. It’s merely another thing to keep building consumer interest — something to add to AMZN’s extensive list of online stores (now consisting of a grocery and automotive outlet) in hopes of continuing its dominance of the e-commerce space and keeping ahead of WMT and TGT.
As of this writing, Anna Rider did not hold a position in any of the aforementioned securities.
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