16 Businesses That Amazon Has Threatened

Businesses That Amazon is Killing


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Businesses That Amazon is Killing

In the Crosshairs

There used to be a time, not too long ago, when you could stroll into your local bookstore and cozy up in an oversize chair with a good read, or just spend time canvassing the aisles. About the same time, you might have found yourself perusing the aisles of a department store, picking up shoes, a purse, maybe even some shirts on sale. Those days are ending soon for many well-known retailers, thanks to the Amazon business model. Consumers love convenience, and Amazon takes advantage of it with shop-from-home service. Make no mistake, the "retail apocalypse" is here. While some businesses are actually thriving because of Amazon, many are threatened by the online giant.


Booksellers: Barnes & Noble

Sales have been sliding for 11 years. It's not so much if anymore, but rather when Barnes & Noble will close its doors. The book retailer, which recently fired its CEO without severance, is one of the last major bookstore chains in the U.S. and has been struggling to keep up with Amazon's lower prices, faster delivery service, and e-book platform. Aside from one lucky year in 2009, Amazon's Kindle has consistently outperformed the chain's Nook e-reader business. In recent years, Nook sales have decreased by more than 20 percent annually. Barnes & Noble has tried to combat shifting attitudes by creating a better "in-store" experience, but the effect has been to create a library rather than a competitive bookstore.

Iconic Department Stores

Iconic Department Stores: JCPenney | Macy's | Sears

Once, stalwart department stores dominated regional malls. They were the anchor tenants, the big boys on the block. Today, many of these stores are closing. Sears, Macy's, JCPenney, and others are facing off against Amazon and losing. Macy's stock price is down roughly 45 percent from an all-time high of $73.61 in July 2015, and Sears has announced plans to close more than 200 stores this year.

Prime Wardrobe may be partly to blame. One of Amazon's many perks for Prime members, Prime Wardrobe offers the ability to "try before you buy" in the privacy of your own home. There's no additional fee for the service. Members get seven days to try everything on, return pieces they don't love, and pay for only what they keep.

Foot Locker

Sports Apparel Retailers: Foot Locker

Amazon's foray into the world of apparel didn't stop at shirts and slacks. The online behemoth has been selling shoes online in a big way. Last year, Fortune confirmed that Nike is officially selling its gear directly on Amazon. While it's only a limited percentage of the Nike product line, this was a blow to Foot Locker, as Nike comprises a big part of its sales. Foot Locker's stock price is currently trading about 39 percent down from its all-time high of $79.43 in December 2016. And Foot Locker announced some 110 store closures in March.

Grocery Stores

Grocery Stores: Costco | Kroger | Target | Walmart

Chains such as Kroger, Walmart, Target, and Costco were already feeling the pinch from Amazon, but its $13.7 billion acquisition of Whole Foods last year seriously sent them reeling. Amazon has instituted price cuts on produce and other merchandise. It also added a fresh food delivery service and online shopping, along with exclusive deals for Amazon Prime members.

Food Delivery Services

Food Delivery Services: Blue Apron

Talk about bad timing: Just a few short weeks after the Amazon-Whole Foods deal, the New York-based meal kit delivery company Blue Apron went public on the New York Stock Exchange and became the biggest IPO flop of 2017. Amazon's foray into the meal kit business hit several other meal delivery companies, as well, including GrubHub, Home Chef, and Plated.

Consumer Electronics
Jorge Villalba/istockphoto

Consumer Electronics Stores: Best Buy

Consumers still seem to want to shop for big-ticket electronics in person, but after browsing the products in a store, they often turn around and buy online to get a cheaper price. This is what was happening at Best Buy. There's even a name for it: "showrooming." Best Buy has been able to hold off Amazon by heavily investing in its own mobile and online presence. Still, some analysts fear that Best Buy's days are still numbered.

Courtesy of amazon.com

Batteries: Energizer

Amazon's launch of its own private-label battery line has put a dent in Energizer's business. Although independent tests give Amazon's batteries an overall score of 71 versus Energizer's overall score of 89, there are folks who prefer a better price over capacity and quality. That Energizer bunny better get hoppin' if he's going to outlast Amazon.

Craft Sites

Craft Sites: Etsy

Craft sites like Etsy are being challenged by Handmade at Amazon. Etsy's personal brand promotion is an advantage over Handmade, but for a seller who wants to get started right away under a trusted banner, Amazon has a clear advantage. It has a painless application process, which cannot be said for Etsy, where acceptance can take up to a month.

Video Game Retailers

Video Game Retailers: Gamestop

Back in 2015, GameStop was determined not to go down as another victim of Amazon's sprawl. However, weak sales and trouble getting customers into stores have forced the company to close 150 locations. Sales dropped 13.6 percent from 2016 to 2017. This month, GameStop also canceled its popular Elite Pro rewards program. With its ability to bypass the costs of a retail footprint, Amazon has a leg up on the video game retailer.

Office Supply Retailers

Office Supply Chains: Office Depot | Staples

Business Prime Shipping extends Amazon Prime's free two-day shipping benefits to all users with a business account — not great news for office supply stores like Staples and Office Depot. Amazon is also offering a credit card to U.S. small business customers that will feature reward points and 5 percent cash back on purchases. It could conceivably use consumer data to tailor the rewards to individuals, thereby grabbing the lion's share of business customers.

Automotive Parts
Streaming Music

Streaming Music: Pandora | Spotify

With its ability to discount music for Prime members, transfer purchased music between devices with no limitations, and upload music files, Amazon Music Unlimited is proving to be a contender in the streaming music arena. Pandora users have complained that the free version has too many ads and a limited number of artists, and it's not readily available outside the United States. As for Spotify, common problems have related to the site being down and streaming issues. It's not music to anyone's ears when these things occur, which may be why more and more consumers are tuning in to Amazon Music.

Drug Stores

Drugstores: CVS | Walgreens | Rite-Aid

Pharmacies are just another in the series of companies that have been negatively affected by Amazon's global domination. With its nearly $1 billion purchase of PillPack, the company is pushing its way into the healthcare sector. PillPack delivers medications to customers in presorted packages and coordinates refills. In a statement announcing the acquisition, PillPack's co-founder and CEO said the goal is to provide "a better pharmacy experience."

Sporting Goods Stores

Sporting Goods Stores: Sports Authority | Dick's Sporting Goods | Sport Chalet

If it seems like there's a lot of empty retail space available, it's partly because sporting goods stores have taken a hit from Amazon. Sports Authority and Sport Chalet are already out of business. Dick's Sporting Goods' stock took a dive when Nike announced its plan to sell directly on Amazon. Dick's is trying to compete, with a price-matching policy that includes Amazon and other online retailers, but it may be too late in the game.


Possibly Threatened: Audiobooks

While it's not on the chopping block just yet, Playster — an audiobook subscription service that costs $10 a month — may soon find itself losing ground to Amazon's $15 Audible subscription. Audiobook devotees disparage the Playster app as "buggy," "inconvenient," and "maddening," complaining that it "doesn't work half the time." That doesn't bode well for the company's future. It also offers 65,000 titles compared with 180,000 on Amazon-owned Audible.

Authors and Publishers

Authors and Publishers

It's a sad state of affairs for authors and publishers. Amazon now allows third-party sellers to compete with the publisher to be the default seller when customers click the "buy button" to add a book to their cart. When books are sold through third parties, rather than direct from the publisher, the author often doesn't make royalties. Independent publishers assert that Amazon "is attempting to drive down the value of books, and therefore intellectual property and creative work in general."