What’s up with Amazon Element?
The dawn of our information age brought with it a lot of promises, many of which were met, and some of which have been thwarted. Originally, the web was intended as a (non-politcal, mostly) libertarian paradise, allowing for the free, unfettered exchange of ideas. The “.com” was almost an afterthought at first; the web, of course, wasn’t going to be commercialized.
However, that didn’t exactly last. One of the great ironies is that the internet, which has opened up countless new avenues for business and creativity, and which has allowed for the democratization of expertise and the flourishing of conversation, has also precipitated an era of major mergers and acquisitions. It’s akin to the cyclic universe theory: an explosion of energy followed by condensing when that initial burst expires (note: this hasn’t happened yet with the universe – it’s kind of a long time frame).
Even just today, there are a spate of merger announcements: Dish Network is in talks with T-Mobile US, Lionsgate is buying Starz to consolidate content, and so on. These are more typical big investor, hedge-fund portfolio shiftings than anything really interesting. The interesting stuff is happening on a different level of merging: the merging of services by some of the internet’s biggest players. We’re entering an age of dramatic integration, where sites won’t be competing to do one thing well, but to do everything for you. The theory is that your mobile device will only need a handful of sites to contain your universe. It starts with Amazon Element.
Amazon Element and Your Grocery Cart
There is a certain type of person – your author may or may not be among them – who still thinks of Amazon as a place primarily used to buy books, and are confused and slightly irritated that there is other stuff on there getting in the way. Just a little side business, they think, stuck in the past, distracting from the purpose of selling books. Younger readers, however, may not even be familiar with the idea of Amazon being a site dedicated to selling books. And that’s kind of the point.
Amazon made a ton of money and became famous as a bookseller, but then they started to expand, recognizing that their model was extremely useful and could encompass other services. Soon, it became an indispensable outlet to buy just about anything, even groceries. With Amazon Element, it is going to start its own line of food and other groceries, cutting out what it considers middlemen (i.e. traditional grocers).
There’s precedence to this in the real world: think of Target or Trader Joe’s selling products that they produce, which lowers costs by cutting down on supply chains, purchasing, and scaling issues. Amazon is using that same model. This gives it more control over pricing, and thus more control over the market. It’s no wonder grocery stores are nervous. When Amazon jumps in a market, the market trembles.
The Mobile Promise of Integration
This is not so much a merger or an acquisition, but rather an integration. It is a service like Amazon realizing that their model can be exported to virtually any market and then using their weight to bring everything under the same rubric. Google has been doing the same thing for years and is beginning to accelerate the process with “Google Buy,” which is coming soon to mobile – just a toe dip in the waters. They want to know if consumers can use Google not only to find a place to buy things, but also to buy those things directly through Google.
All of these things are part and parcel of the age of mobile technology. Computers and laptops made us do things faster, but our smartphones and tablets accelerate that process even more. We know that we can do virtually anything at anytime with them, and so innovative companies like Amazon, Google, and Facebook want to keep us on their sites by offering more and more services. This is often done with acquisition – the American dream is to create a service so valuable that Mark Zuckerburg delivers a forklift of money to your garage, after all – but more and more by making outside services redundant.
Why shop for groceries through Amazon when you can shop for Amazon groceries at lower prices? Why click through sites when Google is giving you the best buying option right on the front page?
It’s up to you to decide if this is for good or for ill. On the one hand, these are extremely innovative companies that can perhaps be flexible and bold enough to really offer great services at lower prices. On the other hand, consolidation in business usually leads to stagnation, monopoly, and a calcifying of the order. However, the exciting thing is that, unlike with, say, oil or banking trusts, we can take our business elsewhere. You don’t have to drive around to try to find an independent gas station; you can just click to another site. Mobile tech may have ushered in an age of integration, but if we don’t like it, we can quickly usher it back out.
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