Here’s an interesting thing I discovered. If you type www.relentless.com into your web browser, guess where it leads… (spoiler alert)… it’s Amazon.com. And it’s also a big clue as to what we should expect from the online marketplace giant as it continues to push deeper into the world of brick-and-mortar retail, groceries and pretty much everything else.
Amazon doesn’t just buy its way into existing verticals like Walmart does, through traditional mergers and acquisition strategies. Amazon links markets together and transforms verticals at the same time.
After all, Amazon started as an online book store, but today it’s an ebook reader OEM, the largest ebook (and audiobook) publisher in the world, the owner of several traditional print publishing imprints, a vast self-publishing marketplace, and major physical and electronic sales channel for the rest of the publishing industry.
The publishing business was once in decline, but now it’s booming. That’s down in part to the ‘relentless effect’.
So, when Amazon began pushing deeper into the grocery business, and bought Whole Foods, inevitably people considered a UK supermarket like Morrisons or Ocado would be the next Bezos buy.
Then, when Amazon bought pharmacy services start-up PillPack sending shares in high street pharmacy giant Walgreen Boots tumbling… well, obviously everyone started considering a pharmacy move was next for Amazon.
But are either of those acquisitions relentless enough? Probably not.
So what’s the next relentless play?
Well, on a recent US trip I met up with a friend from a US based cheese company, who sells via Whole Foods. He told me that the reason Amazon bought the supermarket chain wasn’t some clever plan to get into the domestic supermarket business, one of the main reasons was that it was because Bezos used to shop there and liked it. Simple as that.
So it’s not always easy to predict the brands that will get acquired next because of the influence of Jeff Bezos’ personal preferences, but the motivations behind getting into supermarkets or pharmacy, suggest where his relentless focus is heading next, and it’s probably not simply buying another supermarket, or a chain pharmacy. I reckon Amazon is going to embed itself in the whole high street retail domain, and healthcare too.
Look at what is happening to Whole Foods now. The shop is transforming in terms of automation and efficiencies at the back-end, but more importantly, showcasing all kinds of new front-end retail technologies via Amazon Go. Now what’s really interesting is the back-office efficiencies, the frictionless checkouts, and the blending of Amazon’s online accounts with physical store experiences, these aren’t just supermarket applications. These innovations are applicable across the whole brick-and-mortar high street domain. Whole Foods and Amazon Go is transforming high street retail, not just grocery shopping. Which means Amazon might just as likely buy a failing UK department store (Debenhams, maybe?) as another supermarket brand. And sell its frictionless tech to other retailers, and build partnerships for its new blended retail offerings like Amazon Wardrobe.
Similarly, the acquisition of PillPack isn’t just the beginning of a push into the high street pharmacy vertical, either. It’s really telling that US insurance giant Cigna started to back off from a deal with Express Scripts (pharmacy service) fearing Amazon’s entry into the market. Cigna is a health plan provider, with deep links with hospital chain providers. Also, in the UK, Health Secretary Matt Hancock recently announced an NHS-Amazon partnership to help Alexa give you health advice from NHS choices.
There’s something inspiring about Bezos’ relentless mindset. We see mega-mergers like Asda-Sainsbury; we see Walmart buying Flipkart; we see Tesco partner with Carrefour, who announces a tie-up with Google; and we’ve seen US health giant Cigna back off from an all but done-deal pharmacy acquisition when Amazon enters that domain, too.
Each example looks like a defensive strategy to maintain market share in the face of a relentless assault by Amazon. So who should Amazon buy next?
Your nearest high street and your local GP practice, maybe? You know, that’s not as crazy as it sounds.
So my question would be, does Richard Branson sell Virgin Healthcare to Jeff Bezzos and enjoy a comfortable retirement in the his Virgin Island retreat?
“Your next prescription delivered by Prime anyone?”
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