The destruction of small retail business by a big online company

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Amazon the market leader in online business

Every product or every goods is just a click away and it is very convenient to just put it into our virtual shopping basked, without even leaving the house. But do we even think about the company we are buying our products from?
The online retailer is by far the market leader, for example, Amazon is selling 7 million products on a single “Prime” day, and got thus a monopoly position in the online sales market. This leads into the fact, that the company is able to  pushes the prices at suppliers and producers and they also threaten them with banishment from the assortment.


Amazon as a Monopol

With Amazon “Primeservice”, the Online-giant already bundles its diverse services,  from the streaming service to the premium delivery service - and thus binds customers to the company. Practically practical for the customer, this reduces competition in the long term. Since it makes it difficult to switch to other, possibly cheaper but less broadly based providers.

Amazon`s market share is getting bigger and bigger and the retail sector drops in sales

The book trade is affected by a huge slump in sales by the large group Amazon.
And the market of online trading has been growing in the last few years –not only the book market- and some Experts predict that in the next 15 years every second larger company will be disappeared from the market.
Since customers behaviours have also changed, because it is more convenient to order online, a whole industry is affected.
A change that is already spreading to other industries for example in the US. There currently Staples (provider of office supplies) as well as RadioChack - in the first case to close several hundred and in the second case of over a thousand branches. The "Wall Street Journal" already speaks of a regular fire roll, which with the online provider Amazon under Jeff Bezos the American retailer rolls over.

Many jobs are in danger (Video, Amazon to go)

Algorithms and artificial intelligence would take over many routine tasks in the purchasing and supply control.  And some consultants are on the opinion, that this is  better and faster than human decision-makers, the believe. Trade companies will soon be able to achieve much more with a few talented heads and hands and got more profit out of it, which lead into a higher rate of unemployed people.

 

Amazon Fresh (not in Austria so far)

Test purchases of the Market Monitor “Digital World Problems” shown that Amazon Fresh has still some issues to face: for example the  information of the online portal on origin, ingredients and allergen is partially incomplete. There are also deficiencies in compliance with the cold chain. For example, the temperature was above the normal value for more than every second ordered product. This can be dangerous for health-impaired consumers.
Consumer rights, which apply to the "analogue market", can not be leveraged online. On the one hand, the Consumer Center therefore calls for the review of the legal framework in Germany and at EU level, as well as ensuring consistent food monitoring.
However, further development must be closely monitored.

With our article we want to call attention, that that we, as consumers, have the ability to choose were we buying stuff from. And to raise the question, if we want to support a large corporation that is faced with criticism again and again.
We want to make our readers being more aware, that we also could support our local retail stores, instead being convenient and just order online.

 

Arbeitsgruppe: Fabrizio Pritzi, Lucie Balharova, Daniela Tschögl

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