Technology Stocks To Gain As Retailers Emulate Amazon
Zacks Investment Research | Sep 07, 2017 10:14PM ET
Technology plays a crucial role in the evolution of various sectors, retail being prominent among them. The retail landscape has been witnessing a sea change with its focus shifting gradually from brick-and-mortar to online shopping.
Amazon.com Inc. (NASDAQ:AMZN) has been in the spotlight for the last few years, as changing customer patterns have made the retail industry fall back more on e-Commerce. The company’s technological prowess has provided it an upper hand over other retailers who are still at their nascent stage in the e-Commerce field.
Story Behind Amazon’s Success
Technology is giving shape to Amazon’s innovative business ideas. Apart from providing customers a seamless retail experience — user friendly website and mobile app as well as payment and delivery system — technology has been helping the company in saving costs and increasing transaction efficiency.
Amazon has been also testing waters with innovations. These include a drive-in-grocery delivery service AmazonFresh Pickup wherein one can order groceries online and collect them from a store nearby, and “cashier-less” stores (Amazon Go – the company’s first brick-and-mortar grocery store). It has also added online and offline features to its bookstores.
Not only this, Amazon always tries to bring in different user-friendly technological gadgets that even big tech companies haven’t thought of. The best example of this is Dash Button and Echo devices. These devices are highly coveted for their multi-utility feature.
Amazon’s cloud computing arm, Amazon Web Services (AWS) is providing the entire technological infrastructure. The company is continuously investing in enhancing its cloud infrastructure and Artificial Intelligence capabilities that are helping it to execute plans, better understand customer needs and simplify the overall retail process.
Why NVIDIA & Other Tech Stocks Are in Focus
With Amazon’s recent acquisition of Whole Foods Market (NASDAQ:WFM), the situation has worsened for retailers now. The acquisition has provided Amazon the scope to fortify its position in the brick-and-mortar space, and will enhance its distribution and fulfilment capabilities.
Amazon’s move has raised question about the survival of other grocery store operators, particularly in the United States. Grocery stores already operate under razor thin margins and will thus face extreme difficulty in coping with Amazon’s pricing strategy and the technique of bringing in customers, for which it is well known.
Computer and Technology Sector 5YR % Return
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