Most of the news out of Amazon.com Inc. (NASDAQ: AMZN) this week focused on its new Fire TV, which puts in squarely into the streaming video market. More quietly, the e-commerce behemoth started a new grocery delivery system, which puts it in competition with the nation’s largest supermarket chains, as well has tens of thousands of local groceries.
Amazon.com Inc launched a new product named Amazon Dash on Friday that allows the user to add groceries and household goods to their shopping lists using the company’s AmazonFresh service.
The news service reports that Dash will only be available in parts of the West Coast for now.
However, Amazon rarely stays small when it has a large opportunity. The company claims that AmazonFresh offers more than 500,000 items, including beauty products and household cleaning products.
Just as Amazon challenged Wal-Mart Stores Inc. (NYSE: WMT) in traditional retail — with a great deal of success — it is now up against national firms like Kroger Co. (NYSE: KR). Kroger had revenue of almost $97 billion in its most recent fiscal year. This compares to Amazon’s $74 billion. Kroger and its peers have been challenged also by the grocery business that Walmart has built as a means to improve stagnant revenue.
One of the worries about Amazon’s future is how many business it can enter before its expertise — so valuable in traditional e-commerce — is stretched too thin. So far, founder Jeff Bezos has proven that Amazon can continue to grow at rates that are often above 20%. He has also shown that he can virtually create products for new markets, the most obvious of which are the e-book and e-reader. Groceries, however, are not consumer electronics. And the model that makes consumer electronics e-commerce successful may bear little in common with the sale of salads and soap. The plans for Amazon Dash are aggressive enough that the company should have that answer soon.
Amazon is also working on upping sales through a series of Easter merchandise offerings
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