Amazon has mercilessly crushed bookstores, department stores, big-box retail and malls—and may wipe out shipping companies before all is said and done.
It is certainly not a company to rest on its laurels, so analysis firm CB Insights crunched some data to determine what industries are most vulnerable. Here are the seven industries it thinks Amazon could conquer next:
Since its 2018 acquisition of online pharmacy PillPack, tongues have been wagging about Amazon’s plans for the healthcare industry.
According to CB Insights, Amazon is well-positioned to improve the sometimes painful process of filling prescriptions, thanks in part to its expansive fulfillment network. It could also dispense prescriptions from physical locations like Whole Foods and tie in Alexa to remind customers to take medication, or even to detect conditions and make recommendations.
“As Amazon continues to put its money and influence to work acquiring distribution licenses and potentially acquiring another mail-order pharmacy or two, it’s laying the foundation for an Amazon-branded fast prescription drug delivery system,” the study said.
Small business lending
Amazon began offering small business loans for select merchants in 2011 and has since expanded into services like payments and credit cards. What’s more, many small businesses already sell on Amazon, so it has data like revenue, inventory, sales and future earnings projections to make quick decisions on loan worthiness, and it can apply a percentage of the goods they sell on its platform toward paying off the loans.
“If the company can give its third-party merchants loans that go back into selling products on Amazon, it’s a win for both sides,” the study said. “Amazon gets the increased business, plus the interest from the loans; the merchant gets the capital they need to grow.”
While this is arguably already in the works, CB Insights again pointed to Amazon’s logistics network and its spending power as two reasons it is a “formidable opponent” in online grocery, a business that some estimates show could reach 70% of the U.S. population by 2022.
It is uniquely positioned to keep costs low in this space by using its 450 Whole Foods locations as climate-controlled storage and distribution centers. Amazon is also willing and able to take a hit on delivery in exchange for future market share. It can also apply investments in logistics to other aspects of its businesses. There’s one hitch, though: It will have to build out its physical presence to compete with Walmart.
Amazon has been expanding in financial services for years, including its online depository Amazon Cash, money transfer service Amazon Reload and credit and debit cards. According to CB Insights, it’s a savvy move. If Amazon can get customers to put money into an Amazon account, they will likely spend more with the online retailer. And there’s an existing pain point, as retailers are hit with fees whenever a customer uses a credit or debit card.
“If Amazon can find a way to make its own payments options stickier, easier for consumers to use and cheaper for merchants to accept, it could find huge opportunity in this industry,” the study said.
The mortgage application process, which requires a lot of documentation and waiting, has been stagnant for decades. And while digital platforms like Quicken Loans have emerged, online marketing costs remain high for this industry in particular. Amazon, however, already has 100 million Prime members at its disposal, so it doesn’t have to rely on pricey keywords for awareness. It also already has relationships with banks (and a lot of cash).
Home and garden
Amazon logistics and distribution could also pay off in the home and garden sector, as younger consumers don’t enjoy gardening as much as previous generations. And while they want plants, the study showed that they don’t want to devote time to them and prefer to order online. Shipping plants proves challenging, but again, Amazon is well-positioned to surmount those challenges with its warehouse network and brick-and-mortar stores.
“Amazon can continue to apply pressure on incumbent plant suppliers by directly appealing to younger, more convenience-focused consumers [who] continue to see gardening as an extension of their lifestyle,” the study said.
Amazon dipped its toe into the insurance market in 2016 in the U.K. with accident and theft coverage. As this business gains traction and rumors swirl that Amazon wants to get into the home insurance market, the study showed it’s likely the company will also offer property and casualty insurance. It’s only logical; Amazon has the distribution network and the customer base, the study said.
“Amazon’s strong brand and customer trust could make Amazon Insurance a highly attractive option for customers—especially Prime customers—looking for a more valuable insurance offering,” according to the study.