For years, I would always refer to Walmart as the king of retailing. For those in Rhode Island that remember Ann & Hope, there are a few stories about how Sam Walton pioneered his retail empire after Ann & Hope, a Rhode Island-based retailer. If you are from the RI and older the 40, you are very familiar with A&H; which at one time was the largest retailer as defined by sales per square foot.
As business and society moves along, so did Walmart. A&H closed its stores and now only operates as an outlet store at its original location.
Recently when I discuss retailing, you will hear me say that “There is only one company that Walmart is afraid of … that company is Amazon.”
As Walmart has achieved its success through disruption (retailing, technology), so has Amazon. Amazon’s recent announcement of a new product “Kindle Unlimited,” which for $9.99/month, provides unlimited access to its 600,000 eBook library through its Kindle product (or its Kindle reading app).
After signing up for the service, a subscriber will be able to “read for free” for as much as they like during the month. As an extension of its service, it also offers about 2,000 audio books.
What does this mean? Another excellent example of a lecture associated with “disruptive technology” when an industry, market, business or product is significantly and adversely affected by the introduction of a technology innovation.
We continue to see it every day. Taking a picture without film or a camera using your cell phone. Being able to deposit a check using your smartphone instead of visiting a branch or even an ATM. Watching a movie through Netflix, pay-per-view and yes Amazon Prime.
The top five publishers have pushed back on Amazon’s launch of this new product. So where will this go? At its very least, the product will gain popularity, especially in light of two trends; as devices like the Kindle and younger people change the reading habits and preferences of Americans.
So what with Amazon? Maybe, just maybe over time, Amazon will begin to reduce its inventory of traditional hardcopy books. I can only imagine how much warehousing and labor resources that their traditional book inventory cost its operations. So imagine this … Amazon who started their empire with selling books becomes a product line that once was.
Sort of like the transformation of Walmart and Ann & Hope. So does the new retailing empire transform.