Amazon is 20: from its first office (above) to its future reinventing retail
Amazon is 20: from its first office (above) to its future reinventing retail
A view from John Newbold

Disrupting the disruptor: Amazon's next chapter

John Newbold, Co-Founder at product innovation studio 383 blows out the candles on Amazon's 20th anniversary cake and looks ahead to what the future holds...

Earlier this year Amazon came top of a 383 commissioned YouGov poll of the UK's most useful brands. And it’s no wonder. 20 years ago today, the Internet retailer sold its first book online. Over the past two decades, Amazon has been at the vanguard of evolving the way we shop, read, watch TV and live our lives….

  • 1995 

    The first book sold online is by the author Douglas Hofstadter, entitled Fluid Concepts and Creative Analogies. The public’s imagination is captured by the concept of an online book retailer emailing you reading suggestions. Amazon sets out to disrupt the bookstore model and by 2014, it is selling more than 60% of all books purchased online.

  • 1997 

    In September, 1997, Amazon introduces 1-click purchasing, allowing impulsive shoppers worldwide to click once and see their purchase bagged, paid-for and shipped to their door before having a chance to change their minds. The name, together with the practice receives a patent in America two years later.

  • 2005 

    Amazon Prime launches in 2005. For a yearly subscription, member benefits grow to include one-day shipping prices, Instant Video, Prime Music, Prime Photos and Unlimited Cloud Storage. The service, which now includes same-day delivery, has over 40 million subscribers.

  • 2007 

    The Kindle sees the birth of the e-reader and the connectivity of the device to a digital library platform. It will take a further three years before e-book sales overtake physical book sales in 2010 but that doesn't stop the front page headlines screaming ‘Print is Dead’.

  • 2008 

    Amazon ventures into the audio book market by purchasing Audible for $300 million. It now powers the majority of all audio books.

  • 2009 

    Amazon makes the leap from e-tailer to publisher. It’s expected to publish over 1200 titles in 2015.

  • 2010 

    Amazon Studios launches a video streaming service with a view to producing its own content.

    Programme pilots are aired online for viewers to access and only those that receive the most attention are given the go-ahead to be made.

  • 2013 

    Not content with disrupting how we buy, read and listen to books, Amazon also wants to drive the social conversation around books. In March, 2013, it buys the social network Goodreads, which features user generated reviews and has more than 16 million members.

    In December, 2013, Amazon reveals plans for Prime Air - its Drone delivery system that aims to deliver packages by airborne device in under 30 minutes.

  • 2015 

    Amazon proves it can compete in the TV market. Five years after the launch of Amazon Studios, Transparent - one of its original programmes wins a Golden Globe for best TV series, musical or comedy. Star of the series, Jeffrey Tambor, wins best actor.

So what’s next…?

Amazon is set-up to scale rapidly into many different business models. A variety of broader business models is a part of its DNA, so I wouldn’t be surprised to see it test lots of different types of markets.

Amazon will be clambering to become an Internet Services Provider in lots of areas

Internally, it runs Software Orientated Architecture, basically meaning it can reuse its APIs to rapidly point its interests at new areas and test and experiment with propositions that might stick.

These already include experimenting with on-demand products via Amazon Dash and peer-to-peer delivery models using crowd-sourced drivers akin to Uber.

Other areas could include local services (think guitar lessons, language courses, discounts at independent restaurants etc). Basically, Amazon could become the Uber of everything.

I see three core areas that Amazon will expand into - hardware, people services and Internet services.

One of Amazon’s brave new frontiers with be home hardware and the battle for that as an interface layer (expect to see Google et al in this space too).

Essentially, there’s a lot of revenue opportunity in having ambient real-world objects in the home, which make our connection to the software layer something that is consistent.

We used to talk about people ‘going online’, now everyone is online. At the moment people ‘go to Amazon’. In the near future, Amazon will want strategies that mean Amazon is omnipresent. You can see this playing out already with voice recognition system, Amazon Echo.

Lastly, probably in the shorter term, Amazon will be clambering to become an Internet Services Provider in lots of areas. It will compete with Apple, Google and the like to be the provider of choice for photo backup, film streaming, music etc.

Amazon has a hardware advantage with mature cloud services and a good scaleable hardware infrastructure, but it lacks the brand clout and design quality of some of its counterparts.

Expect to see it acquiring more business (like it did with LoveFilm) to quickly add scale to its arsenal, but also acquiring design businesses to compete with the likes of Apple at a UX and interface level.