Amazon will Crush it in the 2020s, Here’s Why
Jeff Bezos is the business leader of the decade spanning 2010 to 2020. Amazon has matured a lot as a company over these years, but what it will do in the decade ahead, the 2020s, will be even more incredible.
At the Last Futurist we’re covering Amazon’s growth in logistics, healthcare, grocery, the smart home, the cloud and its B2B market as significant areas of steady improvement.
Amazon will Become an Advertising and AI Powerhouse in the 2020s
There’s a lot of momentum for Amazon in the 2020s to become not just the leading B2B marketplace but a leader in logistics as well, potentially disrupting the field in the U.S. While Amazon Prime changed the future of super platforms in the 2010s, Amazon’s entry into several new industries could up-end the trajectory of the technology monopoly in the future.
Amazon will strengthen its AI, smart home market share and notably its advertising revenue in the near future, which will enable it to be one of the R&D leaders of the world.
- Advertising (majority over Google in the product-search category)
- Significant improvements in logistics
- Maturation of highly lucrative B2B marketplace
- Opening of more hybrid physical stores, especially in Grocery space
- Continued leadership in the cloud with AWS
- Improved robotics in e-commerce warehouses and in drone delivery
- Healthcare entry with maturation of 1492 health tech division with considerable implications for the future of EMR, tel-medicine, etc…
- More partnerships in Finance leading eventually to a chequing account
Consider this. According to Morgan Stanley, Amazon Logistics will reach a volume of 6.5 billion packages per year by 2022, far exceeding its estimate for UPS at 5 billion packages per year and FedEx at 3.4 billion packages per year. That’s potentially disruptive. Also in terms of trucking & logistics it will impact the future of the self-driving trucking industry.
Amazon Is Nearly Impossible to Follow with So Much R&D & Innovation
Amazon’s business model in 2019 is already very complex and nearly impossible to follow, from the evolution of Amazon Prime Day (a glorified back-to-school event in July), to gaming, to game streaming with Twitch, to the under rated evolution of its Amazon Prime Video ecosystem, the 2020s will be one of the most significant decades in Amazon’s history. Amazon’s share price is $1,762 at the time of writing, though it should easily surpass $2,000 in 2020 alone.
Amazon Logistics is the e-commerce giant’s in-house logistics operation. Morgan Stanley said Amazon Logistics “more than doubled its share” of the U.S. package volume from about 20% a year ago and is now shipping at a rate of 2.5 billion per year. For comparison, Morgan Stanley estimates UPS and FedEx have U.S. shipping volumes of 4.7 billion and 3 billion packages. As it improves its own logistics it may begin to become a legit competitor of UPS and FedEx as its various investments in the area indicate.
Amazon’s reputation as a disruptive force in business and technology is likely just getting started. From AI, to gadgets, to advertising to grocery and healthcare, it is coming in the 2020s.
In the early 2010s Amazon had a reputation as an overgrown dot com startup, a place for maverick Type A personalities who didn’t want to be part of the Microsoft Borg. How far it has come in just a few years! Jeff Bezos is the richest person on the planet, with ambitions in space and an “everything” store that is like a new kind of monopoly, one that is getting into everything.
All of this and AmazonGo hasn’t even scaled its smart stores yet.
One of the main trends of the 2020s is how Apple, Google and Amazon get into healthcare. Amazon has many ways it could do this very effectively. With increasing advertising revenue Amazon will also be less reliant on the cash cow of AWS, and will be able to focus on R&D in ways that only companies such as Microsoft, Huawei, Google, Alibaba and Apple and a few others are even capable of following.
If technology companies rose to prominence in the 2010s, in the 2020s they will consolidate their moats into super platforms that re-define what a technology monopoly and a tech nation is. If the 2020s are also an era of an early automation economy and logistics, Amazon is well placed in both trends.
Amazon’s Disruptive Reputation in Business Will Continue
Over the last 10 years, Amazon has become one of the most powerful, respected and feared companies in tech and well beyond. It has such hype and good sentiment on Wall Street, it can push its low-margin businesses of E-commerce, grocery and physical stores to new levels of scale and mass adoption. Its surveillance net in the smart home is also increasing, as per the many articles recently about its Ring product.
Amazon is also the leader in smart speakers and Alexa enabled devices in the internet of things. We think of Amazon as a retail or cloud giant, but that also means it will be involved in a leadership position in machine learning and artificial intelligence. It’s already begun to attract some top talent in those areas.
Amazon’s retail penetration is also considerably less than most people believe. In retail and grocery sales Amazon is a small player of total retail sales. However, revenue in its core business, e-commerce, has increased sevenfold from an already massive base of $34.2 billion. Yet Amazon still has only 40% of the overall e-commerce market in the U.S., according to eMarketer, and far less worldwide, leaving plenty more upside.
Amazon as a Transportation, Grocery and Logistics Company in the Real World
Amazon began building out its delivery network in 2013. Six years later it’s clear Amazon will become one of the leading transportation (and logistics) companies in the world. It’s expertise in last-mile delivery will reduce its own costs and usher in important aspects of the early automation economy.
This will likely embed machine intelligence into the trucking, logistics, self-autonomous driving, drone delivery and warehouse automation fields. Amazon Logistics, at 6.5 billion packages per year by 2022, is looking like a distinct possibility.
AWS’s rise is also mostly taken for granted. But look it, AWS has turned from an asterisk to the third-largest enterprise software business in the world, with an estimated $35 billion in sales this year, according to FactSet, trailing only Microsoft and Oracle. AWS will keep evolving, possibly years ahead of Azure, its closest rival in 2020.
Amazon’s scale has really improved in a relatively short period, hitting a total of $70 billion quarterly revenue in Q3 2019. For AWS up 35%, subscriptions to be up 34%. Amazon’s stellar growth suggests it’s just getting started as we head into the 2020s.
It3s progress in logistics and the Cloud alone would be impressive, but advertising, B2B marketplace and AI are all maturing, with a significant entertainment sector.
Amazon’s healthcare play will roll out slowly but in the end it will be one of the major winners of AI and Health tech for consumers, gobbling up biotech companies in the process in the years ahead.
Amazon will Become a Leader in Healthcare and Banking Circa 2025 to 2035
In 2019, it’s behind Google’s AI and DeepMind’s impact on Google Health and Apple’s incredible 60% growth in its wearable sector. However, Amazon has a more direct access to the consumer than both and in this ultimately has a bigger game in the future in both healthcare and banking.
The 2000s were the era of the search engine. Google dominated the market; Amazon gave birth to a new era of e-commerce; and Apple put a computer in everyone’s hand through the iPhone. Then came Facebook’s time. But the 2020s are Amazon’s time just as surely as the 2030s are China’s time. Each in their own place, it is what it is.
Innovation in the U.S. in the 2020s will be led by Amazon. Microsoft, Google, Apple and so many other companies are great companies, but they don’t have the culture or relentless innovation Jeff Bezos has built. It’s this culture that gives Amazon a significant edge and will be able to attract the top talent in the 2020s.
Amazon’s gadget smart home market share is also under-appreciated. In hardware, Amazon was once confined to monochrome e-readers, before stumbling through a failed phone launch in 2014. Today Alexa is everywhere, and every device needs to have it enabled. Amazon will invariably get into the smart phone industry again.
AWS is evolving with blockchain, quantum computing and more than keeping up with the times. Amazon needs to make its own super group of AI engineers that Google has with DeepMind. Amazon can and will do many things in the 2020s that it was not able to do in the 2010s, namely, to achieve global scale. Increased penetration and profitability outside of North America in places like India are crucial for its growth story in the 2020s.
The healthcare industry is undergoing a profound transformation. Costs are skyrocketing, consumer demand for more accessible care is growing rapidly, and healthcare companies are unable to keep up. Amazon won’t just keep up in healthcare, one day it will own it. The healthcare technology market is around $300 billion, and as healthcare costs balloon, Amazon will be there to save the day.
Why Healthcare is the End Game for BigTech that will Quadruple Their Value in the 2020s
Much of Amazon’s master plan revolves around the $3 trillion dollar industry of healthcare. You can see this by its history. As early as between 1999-2000, the company began investing money into Drugstore.com with plans to expand its e-commerce business into the pharmacy space. In July, 2017 it came to light just how much of a stealth approach Amazon has with healthcare innovation with its 1492 health tech division.
By the time the biotech age ignites new kinds of self-enhancements Amazon will be well positioned not just to be a pharma logistics leader competing with Walmart, but capturing and monetizing some of our most valuable data, our health related data.
Areas of exploration include a platform for electronic medical record data, telemedicine and health apps for existing devices like the Amazon Echo. But the end game for Amazon in healthcare is a 360 vision of how we interact with AI in our lives. Of all the companies in the world, it’s Amazon where consumers will go to do this. Just as Amazon took product search marketshare from Google, it will lead the AI-consumer interfaces of the future, and not just with Alexa.
Amazon’s use of private data to shape and promote its own branded goods seems to be a key question for lawmakers and regulators probing the company’s competitive practices. As Google and Facebook continue to get probed, fined and possibly broken up, Amazon I believe will escape this kind of regulation due to the rising timing of the cold tech war with China. The U.S. will realize Amazon is “America’s company”, the last moat against the rising tide of the red machine.
Amazon has become the second-largest employer in the U.S., with more than 750,000 employees.
I hope this article gave you a good overview of where we might expect some progress by Amazon in the future and the decade ahead, that of the 2020s. It’s also worthy to note the follow little stock market tidbit.
If you invested in Amazon 10 years ago, that decision would have paid off majorly. A $1,000 investment in 2009 would be worth more than $13,300 as of Dec. 9, 2019, for a total return of around 1,232%.
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