Amazon: Armed to Beat the Recession

One of the new features released by Amazon allows users to take pictures of items they want to buy with their phones and store them in an online shopping cart until they wish to purchase them from amazon.com, usually for cheaper than a normal bookstore. This application was designed for Apple’s iPhone and allows people to view customer reviews and prices for items through their mobile phones. This new invention is very important for amazon because it allows users to instantly see if they can get the item for cheaper on amazon.com just by taking a picture. One of the reasons that Amazon is so far ahead of the game when it comes to technology is because of the amount of money they spend on research and development. Over the past 5 years they have spent over 4 billion, which is far more than their competitors. For example, over that time span one of their largest competitors when it comes to online shopping, eBay, spent only 2.7 billion on research and development. They have also come out with several other new ways to shop online. They have a new browser widget which allows users to create a wish list from items they see anywhere on the web and retrieve the list at amazon.com. Their new feature coming out for the holiday season is called “Windowshop View” and allows users to view items in a 3-D format, as if they are in a toy store. These new applications are meant to help out Amazon’s bottom line in the long run. With the economy how it is they are not expecting any big gains in the near future.
Although Amazon.com is still the most popular place of shopping during the holiday season, many other normal stores are making big gains. Stores such as Target, Wal-Mart, and Sears are all gaining on Amazon according to polls taken of holiday shoppers. Wal-Mart.com is one of the biggest online competitors because of their ability to offer products that no one else has due to their close relationships with suppliers. For example, Walmart.com was able to sell thousands of Nintendo Wii’s online because of their relationship with Nintendo while Amazon.com was already sold out. Many online stores are likely to fail during the economic recession and therefore Amazon may be in a better position when it ends. Their decision to spend a large amount of money on research and development has benefited Amazon and given them a competitive advantage over other companies.

Business Week. Amazon: Armed to Beat the Recession. Douglas MacMillan