It’s taking over.  It has been said that something as small as the flutter of a butterfly’s wing can ultimately cause a typhoon halfway around the world.  The Amazon effect is a bit more direct.

According to Investopedia:

The Amazon Effect On The U.S. Economy. Amazon.com Inc. (AMZN) is everywhere. By disrupting the way people shop, Amazon has created economic ripple effects that go far beyond the customer’s wallet to directly and indirectly impact economic activity, whether that impact is inflation, jobs or investment.

Amazon announces its entrance into what seems like any industry and an immediate dive in potential competitor stock prices.  Often times, these so called competitors are long time brand name stalwarts.

On April 20th the Annual Shareholder Letter was released.  Here are my brief, and far from expert,  thoughts from the Annual Shareholder Letter:

  1. Amazon Prime has become the backbone of retail convenience.  With over 100 million paid subscribers globally the service I once debated and hemmed and hawed is an easy annual expenditure.
  2. Global growth is going to continue to propel Amazon’s current businesses as well as open potential to new areas of dominance.
  3. Voice is the present and the future.  My wife and I mocked the need for Alexa, but after jokingly yelling out “Alexa, we need paper towels” four or five times the realization of its true convenience (and practicality) melted over us 🙂 We have 3 young kids running a muck and the 15 seconds it takes to find a pen and write down “paper towels”, or unlock and type it into a phone, might as well be an hour.   The same could be said for Siri, Google Home and others. We have not taken the leap into an Alexa in every room, but will keep you posted if this transition takes place and are very much open to your feedback and suggestions.
  4. Prime Video is producing solid content but, in my opinion, is a super weak user interface when I’ve become spoiled with the ease of use of Netflix.  Every time I sign in and have to search for Mary Poppins, even though the kids have watched it the past two days in a row, I just have to wonder if a little bit of the billions being spent on original content could flow over to the home screen.

So what stops Amazon continued rise?  Likely the same progressive destruction that  permeates capitalism.  It could be a scandal, possibly, but not likely a feud with a person in power (wink, wink) or a list of other unpredictable events.  Of the companies that made the list in 1955, there are only 60 (12%) still on Fortune 500 list this in 2016.  Currently, Amazon is creating sizable moats around it’s business enterprises, but as each grows so do the cracks with which a new start up can potentially enter the market.  For the time being, Amazon is bringing the goods, and bring them cheap and I for one will continue to enjoy the experience while it is here!