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Amazon the Retailer: Domination or Troubles Ahead?

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  • (0:20) - Amazon's Retail Growth and Expansion
  • (2:40) - Whole Foods Acquisition: How Does This Benefit Amazon?
  • (12:45) - Amazon Bookstores Impact On Sector
  • (24:40) - Clothing Brands of Amazon
  • (33:00) - Episode Roundup: Podcast@Zacks.com

Welcome to Episode #108 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Maddy Johnson, a Zacks Editor and co-host of the Friday Finish Line podcast, to discuss their favorite topic: retail.

This week, they look at Amazon, but only as a retailer.

There’s a lot going on with its retail ventures, some of which will have a big impact on the entire retail industry.

But it has a lot of balls its attempting to juggle.

Will it be able to be successful in every retail area it enters? What impact will it have on the other players?

What if it, gulps, fails in some areas?

Acquisition of Whole Foods Was a Game Changer

Amazon closed on its largest ever acquisition, the $13.7 billion deal to acquire Whole Foods Market, over the summer of 2017.

Immediately, many predicted the doom of other supermarket chains as Amazon would be able to leverage its huge online presence with over 460 US physical stores.

Tracey and Maddy were both Whole Foods shoppers before the acquisition.

What do they think of it now that Amazon has been in charge for several months?

Could there be trouble ahead for Amazon?

What If You Launch 2 Furniture Brands, But No One Knows?

In early November 2017, Amazon quietly launched two private label furniture brands: Rivet, which is a mid-century modern line, and Stone & Beam, a family focused Pottery Barn-like brand with sectional couches and farmhouse type accessories.

It will offer free shipping with Prime Membership.

But can Amazon compete in the competitive furniture market?

Williams-Sonoma’s (WSM - Free Report) West Elm is the leader in mid-century modern furniture. It is doing double digit comparables in that category.

Target (TGT - Free Report) has teamed up with well-known designers like Joanna Gaines for a Hearth & Hand with Magnolia line of accessories.

Amazon’s cheaper price point also puts Wayfair (W - Free Report) , which only sells its furniture and accessories online, at the center of this competitive landscape.

Does brand matter to consumers?

And will consumers even know that Amazon is now selling Chesterfield couches?

Fashion: The Next Frontier

Amazon has operated its own apparel site, called Amazon Fashion, for several years. In 2016, it launched its own women’s apparel brand, Lark & Ro, which appears to be gaining steam.

But it has also been teaming up with outside brands such as PVH’s (PVH - Free Report) Calvin Klein Underwear for exclusive styles during the holiday shopping period, and Drew Barrymore’s new clothing and accessory line, Dear Drew.

Can it challenge the department stores or specialty retailers like Gap’s Banana Republic on the fashion front?

Or will it be more difficult than many believe to rise to the top of these crowded market places?

Find out on this week’s podcast.

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