THERE ARE AT LEAST TWO SIDES TO EVERY STORY

Is Amazon Good or Bad for the Shopping Industry?

By Talia Klein Perez
 Getty Images: Matt Cardy
When was the last time you made a purchase online on Amazon? E-commerce has been expanding for more than a decade, making shopping more accessible and convenient for consumers. Of the e-commerce retailers, Amazon.com  is the clear Goliath, accounting for over half of the online sales reported by the U.S Commerce Department in late 2016. But is Amazon’s growth good or bad for the shopping industry?
Here are three arguments in support of and three more against the online giant:

 

Three reasons Amazon gives shopping a bad name

 

Shopping on Amazon isn’t as safe as shopping offline

Shopping on Amazon requires users to input their personal information, which puts shoppers at risk. While this is not an Amazon-specific issue, the company make matters worse with its current privacy policy. This policy reserves the right to sell your personal information to other companies, should it decide one day to do so. In fact, the company stood trial in Del Vechio v. Amazon.com as part of a class-action lawsuit for deliberately going against its customers’ privacy preferences and sharing its customers’ personal information with third parties without their consent – and against their wishes.

Not to mention, there has been at least one instance where Amazon’s customer support team was accused of being tricked into handing over sensitive information, thus falling prey to the growing menace of social engineering hacking. Less worrying but still of concern is the fact that Amazon has long had and proactively uses patented technology that not only tracks customers’ purchasing habits but also information about the people its customers buy gifts for.

 

Too many advertisements

Amazon.com is riddled with ads, specifically pop-up ads, each prompting the user to buy another product, based on the user’s unique purchase history. Not only are these ads annoying, but they also drive users to make unwanted and perhaps unbudgeted impulse buys. And while 84% of all shoppers have made impulse buys at one point or another, it may be easier to do on Amazon since it invests heavily in exposing shoppers to new products at every step of their Amazon experience: from first opening the homepage all the way through checkout. The economic consequences on consumers living beyond their means can be devastating. Various studies show that materialism correlates to unhappiness in relationships.

 

Becoming a monopoly hurts shoppers

With Amazon’s latest acquisition of Whole Foods, the company is becoming a monopoly on successfully merchandizing convenience, especially for busy Americans and screen-reliant Millenials, specifically. Between Amazon Prime and Whole Foods, the company may account for a large chunk of Millenials’ discretionary spending.  If Amazon becomes a monopoly, shoppers will ultimately lose out; monopolies kill competition and, once king, they can willingly change customer perks that made them so popular in the first place.

Plus, the success of Amazon and its slew of digital endeavors, including cash-free grocery stores, cause salespeople and shop owners to lose their jobs. In fact, there are 1.2 million fewer people working in the retail industry because of the successes of Amazon and other online retailers. And millions of jobs continue to be threatened as Amazon’s share of online purchases continues to climb. These findings will only keep rising, as Amazon expands to target other goods sectors, including providing delivery services for restaurant-prepared meals.

 

Three reasons Amazon is great!

 

Gives a platform and exposure to small retailers

Amazon allows small retailers to sell on its platform, thus providing them incomparable online exposure. In fact, almost half of internet users in the US live in a household with an Amazon Prime membership and the site gets more than 2 billion visitors every month. How’s that for reach?

In addition to new consumers, small business can’t ignore the benefits that Amazon can bring them, like sales, marketing and branding pushes. It’s no wonder, then that online sales platform BigCommerce found that as many as 73 percent of small business owners have considered selling on Amazon in 2017.

 

Streamlines the shopping and delivery process

The online marketplace sells a wide range of almost everything. Plus, during searches, users get the added bonus of being presented with similar products or products frequently purchased together. This makes Amazon’s comparison shopping of brand vs. brand or product vs. related product fast and effortless.

Another benefit of shopping on Amazon is the immediacy in which purchases are received. With services like Amazon Prime, the customer journey of search – select – pay – possess is near-instantaneous. It’s much faster than most other e-commerce stores. Being the market leader that it is means that the standard Amazon adopts becomes the market standard, which, in turn, benefits all consumers.

 

Pushes Innovation

What truly sets Amazon apart is its brand promise to be “Earth’s biggest selection and the Earth’s most customer-centric company.” Take its Prime video services, with original and award-winning TV shows and movies, or its cloud computing service, which is so successful that it is now expanding to handle classified CIA data.  If the promise of the internet is to provide users with what we need when we need it, whether product- or service-related, then Amazon has proven that those who have the data can deliver on this promise. Also, Amazon’s influence pushes the whole consumer industry forward with innovation, like Amazon Dash and using drones for delivery.

 

Bottom line: Amazon has made shopping more efficient and more innovative for consumers. While it has also boosted small retailers, the e-commerce giant has cost the retail industry more than it bargained for. Is Amazon good or bad for the shopping industry?

 

Co-written by Rachel Segal

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