Amazon has been accused of killing traditional brick-and-mortar retailers, and the company is now branching out into other sectors.
The company owns a whole collection of brands that range from cosmetics to tools, and tech accessories to home linens and furniture.
They also have an astounding 800 trademarks, and have the power to move markets with every new trademark application. As an example, one need only look to meal-kit company Blue Apron’s convulsion this July when Amazon registered for its forthcoming “prepared food kits.”
Even grocery stores aren’t safe with grocers nervously eyeing Amazon’s recent purchase of Whole Foods for $13.4 billion. But there are still a few businesses that Amazon hasn’t yet been able to disrupt.
Back in September, Morgan Stanley Research surveyed investors in attendance at their “Amazon Disruption Symposium.” They asked which sectors the surveyed thought could take the longest for Amazon to disrupt. Here were the results
The top choice among respondents was dollar stores.
Why? Because dollar stores cater to shoppers who are seriously price conscious. Dollar store chains perform best when they have a dense network of physical stores, quite unlike Amazon, which exists almost completely online in the eyes of consumers.
While Amazon offers a huge range of products that will be delivered in two days or less through its Amazon Prime membership, but the membership is only available after a $99 up-front fee. The typical dollar store shopper spends less than $10 in a single trip.
Still, even the super price conscious demographic of shoppers make decisions based on convenience first, and value second. While Amazon excels at one, convenience, dollar stores excel at both.
Respondents identified automotive parts, a $50 billion market, as the second sector that is somewhat safe from Amazon.
Amazon does now offer same-day delivery on car parts in 40 major US cities at prices that undercut rivals in the sector, O’Reilly and AutoZone. And shares of auto parts retailers sank earlier this year on the news that Amazon had cut deals with the nation’s largest car parts maker and was looking at regional distributors.
But car parts aren’t all that price sensitive. The auto parts industry is built on demand for parts with extreme immediacy. DIY mechanics needing to repair their vehicles often don’t want to wait for even a day or two to have a part shipped directly to them, and will go to their local parts store or dealership to pick up a part same-day even if the cost is a little higher.
Amazon also lacks what traditional auto parts retailers offer beyond tools, advice from the seasoned mechanics that work at physical stores. “Those are the conversations that you don’t get online,” said AutoZone spokesman Ray Pohlman to Automotive News in February.
Home Improvement & Home Furnishings
Much like auto parts, when it comes to home improvement—say that leaky faucet or spontaneously broken pipe flooding your basement—shoppers need both immediacy and professional expertise.
Amazon did try to break into the home improvement market in 2014 with its Amazon Local Services entry, a marketplace for contracting with service professionals like plumbers and electricians. The platform was renamed Amazon Home Services in 2015 launching it with more options, adding handymen plus niche offerings like goat grazing and singing performers. But the platform never really caught on.
As for home furnishings, shoppers still want to see and feel these items before purchasing, something that will be a challenge to overcome for Amazon.
While it’s easy to buy things like toilet paper or DVDs online, shoppers struggle to commit to buying something like a couch or curtains sight unseen.
But such buying habits may not last forever. Online mattress companies like Casper, Purple, Leesa, and others, have broken the long-standing notion that consumers would never buy something with as much importance as a mattress online without being able to test it in-store.