Internet

The Costs of Amazon’s Dominance

Since its founding in 1994, Amazon has seen a dramatic rise to prominence, largely fuelled by the growth of the internet. In the first quarter of 2019 alone, Amazon reported an overall revenue of $59.7 billion. In the year since, its growth and gradual expansion shows no signs of stopping, let alone reversing.

Modern-day Amazon has expanded well beyond being one of the first basic steps towards online retail that it was in the nineties. Indeed, Amazon now has its hands in businesses as wide-ranging as electronics, clothing and furniture through to books, digital media, on-demand streaming and even hardware such as its series of Kindle e-readers. There are likely few people if any today with internet access who do not recognise that familiar yellow smiling arrow logo.

At a glance, such rapid growth as Amazon’s is quite impressive, and it is undeniable that it has provided quite a great deal of convenience in acquisition and purchasing in the daily lives of everyone that has access to it. However, such growth and convenience always has a cost. Amazon’s expanding dominance over the retail world across the west has proven a disruptive or otherwise negative force towards various aspects of not only the retail industry but also individuals and society as a whole.

Impact on Traditional Retail and Small Businesses

The most obvious evidence of the cost of Amazon’s modern-day status as an online retail giant is the effects it has had on traditional brick and mortar retail brands. Covered heavily by the media since the start of the last decade, there have been several retail brands and chains that have since shut down or were forced to downscale.

This is due both to the decline of foot traffic to physical retailers, as well as hesitancy or inability in some brands to establish a viable online retail presence with which to compete. In practice, the most successful businesses that have adapted to Amazon’s presence tend to be ones that have been able to match Amazon in user-friendliness and convenience in most or all aspects of its online storefronts, which can help drive traffic back to physical locations oftentimes.

Less covered, however, is the direct impact of Amazon’s rise to power on small and medium businesses, such as individual shops, independent local chains, and retail establishments on main streets and high streets. “Family-owned and individual-owned businesses have very few if any ways to cope with the loss of foot traffic resulting from the convenience that Amazon’s good delivery networks provide, let alone capitalise on the changing landscape.There are many new innovative startups which plan to leverage on existing small businesses. But,none of them have succeeded so far.”says Nirmal Singh,founder of HelloDiya,a shopping assistant website based in Bangalore,India.

“What’s more, getting your own physical or online retailing business off the ground is perhaps more daunting than it’s ever been. Even if you manage to attain a viable niche or begin to experience true growth, start-up companies by their nature are most often prime targets for acquisition by corporate giants such as Amazon if the start-up’s innovations line up with Amazon’s present expansion strategy,”says Sam Bourgan,founder of Newswatchngr, an Amazon product review website. This kind of expansion can and has resulted in a much harsher climate for small towns and independent retail, hardware, and software firms across the world and encourages monopolisation.

Scandals, the Environment, and the Individual

Convenience is not the only thing felt at the customer and end-user level by Amazon’s modern-day power in the retail and technology world. Indeed, the prevalence of Amazon in the digital and even physical arenas means that this same convenience can sometimes lead to people buying goods they do not actually need, enabling habits that are not very conducive to saving funds for investment and other purposes.

What’s more, Amazon has been no stranger to controversy over the working conditions for many of its employees across the vast network of warehouses and distribution facilities. Scandals and controversies have abounded, especially in the past decade. Similarly, there have been various issues with counterfeit items and taxation.

There is also, of course, an environmental angle to Amazon’s preeminence in the retail world due to its complex logistics With more and more peoples’ goods being shipped by plane, often intercontinental before finally even reaching the customer’s home region, Amazon has a very prominent place amongst other tech giants in contributing to global carbon emissions.

With all of these being perhaps the tip of the iceberg, it is quite easy to underline the fact that Amazon’s takeover of the online retail world has had very visible consequences in physical retail and all adjacent industries—as well as individuals and society as a whole.

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