Saturday 23 December 2017

Amazon Immunity? These 15 Businesses May Be Avoiding the Amazon Effect

How many times have you walked into a store, found something you’d like to buy, then gone home to purchase it on Amazon Prime? I’m certainly guilty of it. Amazon has so brilliantly positioned its business model that it seems like you can find nearly anything you want with just a few mouse clicks. This convenience is putting out a lot of businesses and jobs. In 2015 alone, Amazon eliminated 222,000 jobs across the U.S.
From costumes to Legos, books and DVDs to a pair of brand new Levi’s, almost anything your heart desires seems to be available for purchase on Amazon. The e-commerce behemoth’s guiding force has always been very clear and straightforward. Amazon has always set out to be customer-focused and create a place online where customers can purchase anything they want.
Jeff Bezos, the mastermind behind the operation, is one of the richest men in the world (only going back and forth with Bill Gates). And for good reason. Amazon has given most big-box stores a run for their money over the past 18 years. What’s surprising is that some businesses have been able to stay mostly unaffected by Amazon’s growth. Raising the question: Are some businesses immune to Amazon? It seems that for now, these 15 are.

1. Starbucks 

In the 2016 holiday season, one of every six American adults received a Starbucks gift card. Starbucks closed out 2016 with a net revenue of $19.2 billion. The coffee tycoon has touched neighborhoods all over the world, and as many know, it’s surprising if you can’t find a convenient location to grab your cup o’ joe. So what makes Starbucks immune from Amazon? While it may feel the impact from Amazon’s expansion into the grocery business, the Seattle-based coffee company’s footing will remain strong — barring Amazon doesn’t decide to open a chain of premium coffee shops. 

2. Dunkin’ Brands 

Dunkin’ Donuts and Baskin Robbins nest under Dunkin’ Brands. Headquartered in Canton, Massachusetts, Dunkin’ Brands has been providing shareholders with dividend yields of over 2% for quite some time. It’s fair to say the world continues to run on Dunkin’, and Amazon doesn’t seem to be encroaching on that. Even with talk of Amazon Prime Air drone delivery and Amazon Eats, it will be a stretch that the e-commerce giant will be offering donuts and ice cream anytime soon. 

3. Dollar stores 

When Morgan Stanley Research was trying to figure out which businesses would take the longest for Amazon to disrupt, dollar stores were at the top. Dollar stores have found a niche in providing both convenience and value to price-sensitive shoppers. An average run to the local dollar store has shoppers spending around $10 per visit. Furthermore, the typical dollar store shopper is not interested in paying a yearly $99 subscription to be an Amazon Prime member. All of these factors combined create a stable environment for dollar stores to avoid Amazon disruption. 

4. Waste Management  

When it comes to Amazon immunity, Waste Management has it. All of the packaging and trash we receive from Amazon Prime deliveries must be taken away. That’s one of the many reasons Waste Management has little to fear when it comes to Amazon attempting to take it on. Waste Management doesn’t just take away your trash, but it also deals with recycling and maintaining landfills. The work done by Waste Management is big business. Not surprisingly, the more humans that roam the earth, the more trash is created. That being said, WM and its competition remain resilient in times of economic downturn, continuing to deliver dividend yields over 2%. It’s unlikely that Bezos wishes to get his hands this dirty. 

5. Tiffany and Co. 

You can hop on Amazon today and purchase a diamond ring. You cannot purchase a Tiffany and Co. ring on Amazon. Founded in 1837 in New York City, Tiffany and Co. created a brand that continues to translate class, simplicity, and a lifetime of elegance. A Tiffany diamond will somehow always carry a little more weight than a diamond purchased at Zales or Amazon. Because of that, Tiffany and Co. has nothing to fear when it comes to the Amazon’s world takeover. 

6. Dave and Buster’s 

Eat, drink, play, and watch sports. That is what you do at Dave and Buster’s. With over 100 locations in North America, the D&B goal is to continue expanding. It’s easy to see how Dave and Buster’s would be Amazon-immune. The business offers nothing that Amazon seems too crazy about wanting in on. The ultimate arcade and good-time experience will continue to appeal to the masses, regardless of what Amazon has up its sleeve. 

7. Wynn Resorts 

Wynn’s luxury resorts are sprinkled from Las Vegas to Cotai, Macau to the Boston Harbor. It’s absolutely possible that economic downturns would negatively impact Wynn’s bottom line, but would Amazon? Not likely. Jeff Bezos is known for taking risks into the unknown, but even Bezos pulling out a luxury resort chain would be a surprise. 

8. Ross and T.J.Maxx 

These stores share a similar business model and are considered off-price retailers. Here’s how it works. Ross and T.J.Maxx purchase close-out merchandise from manufacturers’ overstock for a fraction of the normal cost. Then, these off-price retailers are able to sell the merchandise to shoppers for 20-60% of the department store price. This unique business model allows these stores to perform better than department stores when the economy takes a dive. Amazon isn’t able to offer these kind of discounts to shoppers, making off-price retailers immune to it. 

9. McDonald’s 

Mickey D’s is global, operating in well-over 100 countries. McDonald’s has been nearly unstoppable at slinging burgers since 1958. The company dividends are consistently yielding over 2.4%, returning $14.2 billion to shareholders in 2016. As long as Amazon does not decide to open a worldwide chain of fast-food restaurants, the Golden Arches should be just fine. 

10. American Water Works Company Inc. 

Everyone needs water, whether you’re using it to flush the toilet, taking a steamy shower, or filling up your glass for a big gulp. It’s a non-negotiable for life. Headquartered in Voorhees, New Jersey, American Water Works whips up clean and affordable water to 47 states and over 54 million individuals here in the United States. Because of the hard work of American Water Works and rivaling companies, the U.S. water supply is a reliable luxury that has Amazon immunity. 

11. Home improvement stores 

There’s a certain amount of human interaction needed when it comes to home improvement projects. Particularly when it comes to knowing what to purchase in order to achieve all of your DIY endeavors. Home improvement stores like Home Depot and Lowe’s may feel a bit of a sting from Amazon’s expansive product inventory, but the human interaction should keep these businesses going strong. 

12. Carnival Cruise Corporation 

Sure, cruises are not for everyone. But they are for a lot of people around the world. Carnival Cruise Corporationis the largest in its industry, holding the largest market share. The cruise industry will likely suffer during economic downturns, but they shouldn’t suffer from Amazon’s growth. “The World’s Most Popular Cruise Line” services millions of patrons each year, with no signs of letting up. And Jeff Bezos is showing no signs of attempting to take over these waters! 

13. Home furnishing stores 

Stores like Ikea, Pottery Barn, and Restoration Hardware have a strong and loyal customer base. The same as home improvement stores, customers demand a certain level of human interaction. Of course many consumers will visit to purchase a couch or a lamp, but when it comes to decking out your home’s interior, it’s nice to have some guidance. Amazon’s Home Services enables you to go online, select your zip code, and potentially find a person to come to your home and assemble your desk, however it doesn’t seem to be catching on. As for now, the home furnishing store industry seems to be reasonably immune to Amazon. 

14. Cedar Fair L.P.  

Theme parks have been a mainstay for American fun-seekers since the 1800sCedar Fair L.P. houses 13 theme parks and water parks under its umbrella. Unlike Disney, Cedar Fair isn’t meddling in the film industry, and it doesn’t have brick-and-mortar stores selling tons of memorabilia. Because of this, Amazon doesn’t pose any threat to Cedar Fair L.P. The theme park honcho delivers high dividend yields to its shareholders year after year. Once again, unless Bezos feels the urge to get into the theme park industry, Cedar Fair should remain safe. 

15. Moet Hennessy 

Selling liquor and wines on Amazon is risky due to the uncertainty of the age of buyers. There are laws preventing this in many states. Moet Hennessy houses high-end champagne and liquor brands such as Dom Pérignon and Belvedere. If you chose to purchase a bottle of Dom on Amazon today, you would find that the fine champagne can only be distributed in three states plus the District of Columbia. State laws prevent Amazon from taking over the liquor industry. Unless those change, Moet Hennessy and the like should remain immune from the Amazon effect.

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