Weddings, Furniture, Car Parts, Pharmaceuticals? What’s Next For Amazon? – Forbes

Wedding and party place decoration with lamps and garlands

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Outdoor Wedding Scene

It may feel like Amazon has already expanded into every category imaginable, but the company continues to surprise us by announcing new product offerings on a near weekly basis, it seems. In case you missed it, Amazon has recently announced forays into four new major product categories: handcrafted wedding items, furniture, auto parts and concert tickets. The company has even hinted that it might enter the pharmaceutical market. Below, we outline each of these categories and Amazon’s potential impact on them, and then theorize on what steps the company may take in the future.

Amazon Handmade Wedding Shop

On May 23, Amazon announced that it is getting into the wedding business by opening a Handmade Wedding Shop featuring handcrafted items such as décor, invitations, gifts and jewelry. The company suggests that Handmade at Amazon is the “premier destination” to shop for handcrafted and custom items while supporting local artisans. Customers can create a wedding registry, buy wedding favors and accessories, and pick out luggage for a honeymoon at the Handmade Wedding Shop. And, of course, Prime members can get Prime-eligible handmade products delivered for free in two days.

What impact will it have?

In 2016, the US wedding market was worth approximately $72 billion, according to market research firm IBISWorld. Today, many couples utilize both regional stores and online boutiques and designers for wedding invites, favors and decorations. They might shop at both a Michaels store and on Etsy, for example. Now, they can add Amazon to that list of online providers. Amazon’s Handmade Wedding Shop also offers handmade jewelry options, which will impact both local jewelers and chains such as Kay Jewelers, Tiffany & Co., Jared and Zales. There is no real dominant player in any of the wedding categories, so Amazon has the potential to erode sales from existing retailers across the wedding segment.

Amazon Furniture: Expanded Selection

First comes marriage, then comes furniture! According to The Wall Street Journal, Amazon is expanding its furniture services and building four warehouses focused on handling bulky items. The expansion includes sofas from Ashley Furniture and Jonathan Adler home décor. Amazon is also adding custom furniture-design services and speeding up delivery to one or two days in selected cities.

What impact will it have?

Online sales of furniture continue to grow and, according to IBISWorld estimates, e-commerce now accounts for approximately 16% of the $71.8 billion US furniture market. For Prime members whose orders total $25 or more, shipping is free for furniture sold and shipped directly by Amazon. Shipping for orders sold by third-party sellers on Amazon may cost more.

Amazon’s expanded furniture program may impact competitors such as Wayfair, Pottery Barn and Crate and Barrel, all of which are facing pressure to ship faster and cheaper. Wayfair offers free shipping on orders over $49 and delivery times range from one day to more than two weeks, whereas Crate and Barrel offers a sliding scale for the shipping of orders up to $220; for orders over $220, the shipping cost is 10% of the merchandise total, and shipping times range from three to seven business days. Pottery Barn also charges shipping on a sliding scale based on order value, with delivery costs running above $100 for more expensive items. Consumers may be much more inclined to shop for furniture on Amazon, given that major competitors charge more for shipping and take longer to get items to shoppers’ homes.

Amazon Your Garage: Replacing Auto Parts

In January, Amazon struck deals with several of the largest auto parts suppliers in the US to sell their products directly through Amazon. According to the Financial Times, US auto sales grew by only 1% per year over the past decade, but sales at major aftermarket auto parts chains grew by 7% per year. Research and consulting firm Grand View Research said that the aftermarket auto parts industry generated more than $68 billion in revenue in 2015.

At Amazon Your Garage, users can find parts and accessories, and ask other users for tips and advice. Shoppers only need to input their car type, year, manufacturer and model in order to search for parts on the site. Currently, Amazon offers same-day delivery of auto parts in 40 cities.

 What impact will it have?

Auto part retail chains will feel the impact of Amazon’s entry into the market. Amazon will be in direct competition with aftermarket auto parts retailers such as AutoZone, Advance Auto Parts and O’Reilly Auto Parts, which have thousands of locations around the country.

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