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Questions
- Which of these is NOT a reason why Amazon’s logo has an arrow going from A to Z that looks like a smile?
A: They want you to think that they sell many products.
B: They want you to associate the company with happiness.
C: They want you to think that they sell arrows and dictionaries.
- Why did Jeff Bezos decide to sell books?
A: They are cheap to buy.
B: He likes to read.
C: Many people are good at writing.
- Why did Jeff Bezos change his company name from cadabra.com?
A: Because it would make people think of a dead body.
B: Because it would make people think he didn’t want to stop.
C: Because it was a name that had a very negative image.
- Steven says, “Amazon’s growth has been exponential”. Which of these sentences defines “exponential”?
A: A type of test that is used to understand how something works.
B: The way in which something increases in wealth.
C: Something that increases at a faster and faster speed.
- What does “high volume, low profit” mean?
A: Selling as many things as possible, cheaply.
B: Charging a high price for something in order to sell many of them.
C: Paying as much as possible for items that you want to sell.
- Steven says, “a bricks and mortar store like Wal-Mart”. Which of these is closest in meaning to “bricks and mortar”?
A: An online shop.
B: A real shop.
C: A hardware store.
- How does Amazon predict what we are going to want to buy?
A: They study our purchasing habits.
B: They put things next to the cash desk.
C: They target the general population.
- Which of these is one thing that the Amazon app enables people to do?
A: Find what you want in an electrical store and buy it at that store.
B: Make purchases on Amazon while you are in another store.
C: Search for the best deals in your local area.
- Which of these is NOT a reason why Amazon can charge lower prices than regular shops?
A: They don’t have to pay for electricity.
B: They don’t have to pay for the things they sell.
C: They don’t have to pay for rent.
- How did Amazon convince Diapers.com to sell their site?
A: Amazon lowered the price of its diapers for longer than diapers.com could.
B: Amazon bought up all of the diapers in the world.
C: Amazon started to make and sell its own diapers.
- What is Amazon’s goal for its warehouse?
A: To have customers pack their own boxes.
B: To bring in many more staff.
C: To completely automate.
- What do Amazon Go and Amazon Cart allow customers to do?
A: To eat and drink whatever they want in any shop.
B: To take things and not have to wait in line to pay for them.
C: To automatically upload their shopping list to any shop they visit.
- What is one disadvantage of Amazon Go and Amazon Cart?
A: People can’t always find what they are looking for.
B: People don’t get to talk to other people.
C: People spend more money.
- What is the goal of Amazon Prime Air?
A: To compete with shops in respect to speed.
B: To compete with shops in respect to price.
C: To complete with shops in respect to volume.
- What is Amazon’s main goal behind smart houses and the IoT?
A: To make sure that people can control all of their devices easily.
B: To enable people to have fully smart houses they can control from a phone.
C: To connect everything to help you buy more from Amazon.
- Which of these things does Amazon probably NOT know about you?
A: What your friend’s names are.
B: What kind of things you buy.
C: What your favorite snack is.
- What do you think about the social implications of online stores like Amazon?
- Do you think that 3D printing has the ability to hurt online stores like Amazon?
- What are some of the advantages and disadvantages of the IoT?
- What do you see as the future for Amazon?
Answers
- C 2. A 3. A 4. C 5. A 6. B 7. A 8. B 9. B 10. A 11. C 12. B 13. C 14. A 15. C 16. A
- What do you think about the social implications of online stores like Amazon?
The lecture outlined many of the social implications of online stores and it is obvious to anybody that they are shutting down regular stores which simply cannot compete. However, I want to ask here whether it is possible to judge this action as either positive or negative because it is simply another step in the evolution of society’s buying habits. Throughout history, the retail industry has always tried to stay one step ahead of what people want. They try to predict what we will want to buy and where we will want to buy it. Without customers, they are not an industry, so they always have to try to adapt. This is why we moved from small local stores to large out of town supermarkets. The retail industry realized that people wanted to buy in bulk, and they wanted to buy as cheaply as possible. The retail industry came up with a way to do that. Now, people want to buy cheaply, but they want to buy without leaving their houses. You cannot say Amazon is bad for this because Amazon is merely reflecting what the buying public want. Some people say that we should refuse to use Amazon in order to save the “high street” and that is a very good argument. The fact that people don’t vote with their dollars is a very good sign that people in general are happy to move to the next form of retail. Presumably, at some point, there will be another form of shopping that will supplant Amazon as well. This is the way of the world. Society’s shopping habits are changing, and the retail industry is adapting to that. This is not something we can judge because it just “is”.
- Do you think that 3D printing has the ability to hurt online stores like Amazon?
At this point in time, I don’t believe that 3D printing will have any effect on Amazon. However, that isn’t to say that 3D printing will change our society in the future. 3D printing, in its current form, is very slow and expensive. To make something usable can take longer than a day and requires specialist software. The materials are expensive and it is often far cheaper to buy a finished product than it is to make it yourself. It’s true that 3D printing is fun and that it can make objects and shapes that conventional processes cannot make, but it is not yet commercially adaptable. However, like all technology, 3D printing will gradually get faster, cheaper, and better. Once this happens, it may become a viable option to print the things that you need in your house. But just because it is possible, doesn’t mean that people will do it. If we assume, for the sake of this question, that 3D printing has reached the point that anybody can make anything at home, what effect will this have on Amazon? Companies like Amazon are very good at shifting to supply what people want. If at home 3D printing has become the norm, then Amazon will likely become a vendor of designs and printing materials. However, Amazon is anticipating that at some point its current business model will not be effective and it is starting to shift away from being a shop. As the lecture said, Amazon has fingers in many pies at the moment. If people stopped buying actual products, then Amazon will probably move to another area of business entirely. In the long run, I don’t think they will be hurt too much.
- What are some of the advantages and disadvantages of the IoT?
The IoT is growing exponentially and there are already more connected devices than there are people on the planet. Let’s look at the advantage of convenience and the disadvantage of security. There is no arguing that the IoT will make our lives more convenient. From fridges that order food themselves to baths that fill themselves when they know that you want them too. The IoT is a world where all devices communicate with each other and do tedious jobs that would normally take away our time. The main purpose of the IoT is to make life easier for us. This will spread from our homes into our workplaces and more and more devices will be invented and become connected. In a few years, we will have autonomous cars, which will be another connected device in the sea of the IoT. However, you cannot talk about the benefits without talking about the problems. As more and more devices become connected, it becomes more of a problem if hackers decide to attack any of the networks. This could be a minor annoyance if they decide to hack into your fridge, to a much larger problem if they hack into pilotless planes, or even power networks. The more things that are connected, the easier it is for hackers to cause mayhem. This is why any advances in technology have to be in sync with advances in security. The technology companies must always stay one step ahead of the hackers. Hopefully, in a world where everything is connected and people are living lives of ease among countless automated systems, the hackers will have lost interest in causing trouble. Unlikely, but you never know.
- What do you see as the future for Amazon?
I think that Amazon is going to move into more and more areas of our life until it is far more than just an online shop. As the lecture says, they are already moving into robotics, face recognition and the IoT. It won’t be long before these become the main parts of its business. It will presumably always be a retailer, but there is far more money to be made in the cloud and through the storage and use of data. It is also likely that Amazon will buy up more and more other businesses in order to increase its reach. This is something that other tech companies, like Google’s Alphabet, are doing. Through selective purchases, Amazon can branch out into many other fields that it previously had no experience in. Lastly, Amazon has just received permission to launch 3,800 satellites into orbit to bring the Internet to people in countries that don’t yet have access. This seems like a very altruistic and noble gesture, but Amazon is doing it for purely financial motives. The more people that have access to the Internet, the more people that can use Amazon products and purchase from Amazon. I think Amazon’s goal is to financially benefit from everybody on the planet. And, that goal might not be too farfetched.
Transcript
Hi. Good morning, everybody. How are you today? Today, I want to try and talk to you for ten minutes about Amazon, not the river, the company. Before we start two challenges for you, though. The first one: multiple-choice after you finished listening to this talk, if you go to my homepage – the link’s in the description below, stevenaskew.com – you can find questions about this talk, you can find multiple choice and essay questions. You can try those. The answers are there. And there are some sample essays as well. You can also download them all as word documents and you can listen to the MP3 of this talk. There’s challenge number one. Challenge number two: this talk’s about Amazon. Obviously, I’m not going to say everything there is to know about Amazon. So, after I finished, go and do some research … go and do some research yourself, and then put some more information in the comments down below. I mean, I like to learn as much as I can. So, anything you can tell me, please do. All right. Here we go. Ten minutes about Amazon. Three, two, one, go.
So, Amazon is a huge multinational company that I’m sure most of you will have used at some point in your lives. Let’s start by looking at the logo of Amazon here. Now, this basically says everything we need to know about Amazon. If you look at the logo, it has an arrow going from the A to the Z, or the Z. What that basically means is Amazon carries every product from A to Z. Also, the arrow makes a smile. So, they’re trying to make you happy. They want you to associate happiness with Amazon.
Right. Let’s have a quick look at the history of Amazon. Amazon was obviously started by a man called Jeff Bezos. In 1990, he was doing a regular job and he noticed that the Internet was taking off, Internet companies were expanding and the Internet was increasing by about 2300% a year, which is staggering. In 1993, he was thinking about changing his job and he wanted to set up an online business. So, he sat down and he wrote a list of about 20 things he thought he could sell online. And then he narrowed that down to five things. Then he narrowed it down to one thing. He decided on books. Why books? Well, basically because in the world there are millions of different types of books. Books are very cheap. They have a very low unit cost. And literature … reading is also worldwide. So, books can be sold irrespective of company … er … irrespective of country. So, he started off by selling books. In 1994, he quit his job. He used all of his savings and he borrowed $250,000 from his parents. And he set up his business. I don’t think my parents would have $250,000 if I had a good idea. But who knows?
Anyway, he started by calling his company cadabra.com. That comes from the magic word “abracadabra”. However, he was talking to a lawyer and the lawyer misheard him and thought he said cadaver.com. “Cadaver” is obviously a dead body. He didn’t want to associate that with his company. So, he changed the name. He then bought relentless.com, but “relentless” also has a … I mean it’s … it’s a positive image, but it also has a negative image. Relentless is something that won’t stop, even if you don’t want it … even if you want it to stop. So finally, he settled on Amazon.com. He chose Amazon because “a” is a good letter. If you make a list of companies, “A” always comes to the top. Also, the Amazon River is exotic. And it’s the largest river in the world. He wanted his company to be the biggest river, the biggest company in the world as well.
So, July the 5th, 1994, Amazon goes live. The very first book sold on Amazon. Now, I’m sorry. I’m going to have to read this and I don’t even know if I’m pronouncing it right, is Douglas Hofstadter’s “Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought”. I’ve never actually read that book. If you have, please post a comment down below. I’d love to know what it’s about. Anyway, within two weeks of setting up the company, he’d sold books to all 50 states … Of America. Of course. And he was making twenty thousand dollars a month.
Now, since then, Amazon’s growth has been exponential. However, its profit has not been exponential. As Jeff Bezos said when he first started the company, anybody that invested money in the company would not see a return on their money for quite a while because his primary goal was to reinvest all of the profits into the business. He wanted to expand, expand, expand. He wanted to take over the entire market and then start making a profit. Anyway, over time, the logos have changed.
Let’s have a quick look at those logos. The most recent one is over here. The most recent logo was designed by somebody called Anthony Byles. That’s a picture of him there. Anyway, let’s have a quick look at the Amazon business model. So, the Amazon business model is very similar to Wal-Mart’s. What Wal-Mart do is they try and buy products as cheaply as they can and sell them as cheaply as they can. They see that making a one cent profit on one million things is better than making a 10 percent profit on a thousand things. I think my maths is right there. They want to deal in high volume, low profit. Amazon does the same. They try and buy things as cheaply as possible and sell them as cheaply as possible. However, Amazon has an advantage over Wal-Mart in that they don’t have any real estate. They don’t have, I mean, other than their warehouses, they don’t have any shops. They don’t have any buildings on the ground. So, they have a … they make a lot of savings there.
Right. Today, 2020, approximately 40 percent of all retail sales in the world are on Amazon. That is a huge amount of shopping. That means 40 cents of every dollar is spent on Amazon. Why is that? Well, there are a number of reasons. Obviously, there’s a huge amount of choice. Basically, anything is on Amazon. It’s convenient. You don’t have to leave your house. It’s cheap. And there’s free postage, if you pay for Amazon Prime, you get free postage. But those are not the main reasons.
One of the main reasons and one of the biggest advantages that Amazon has over a bricks and mortar store like Wal-Mart is that they can be anticipatory. They can know what you’re looking for. Sometimes before even you do, they study your buying … They study what you buy. They study when you buy it. How you buy it and what you look for. And they use AI and algorithms and they can guess what you want. So, when you log onto Amazon, at the side, you always get “recommended for you”, “Have you thought about this?” Amazon is trying to sell you things. You know, when you go to a supermarket and you come up to the cash desk? You know, there are a lot of things by the cash desk? That’s the same kind of thing. They’re hoping that those are the things you’re going to want, the things you’re going to want to buy. Amazon is doing that in a way that supermarkets cannot. Supermarkets can only target the general population. They can only think many people would want to buy this. Amazon can target us individually. They can learn from our shopping strategy. They can see what we want. And they can try and sell it to us. That way, we buy more. And of course, in the end, Amazon is a business. They will do anything they possibly can to make us part with our money more readily.
Ok. So that’s one thing Amazon does. So, that’s one of the reasons why Amazon is so much more successful than a lot of regular shops. Now, another thing Amazon has also started doing recently is they want your business wherever you are. And Amazon understands that you are going to go shopping. You are going to go into the city and you are going to look around shops. And Amazon sat down and thought, how can we get money from that, too? So what Amazon has done. If you’ve got the Amazon app, you can actually open up the camera and you can scan a product or you can even scan the barcode. So, when you’re walking around a shop, a supermarket, electrical store, you think, oh, that TV looks nice. Open up the app, scan the barcode and you can see the price on Amazon. And almost always it will be cheaper on Amazon. Click. Buy. A lot of people are doing that. They’re using regular shops as showrooms, almost. They’re walking around the shops and they’re finding the product, getting on Amazon, ordering it there. Is that good? Is that bad? Mm hmm. Who’s to judge?
So, let’s have a look at the social impact of Amazon. Well, you cannot deny that Amazon is shutting down regular stores. Amazon is shutting down a lot of small stores. Toys R US, for example, is one of the stores that’s gone bankrupt primarily because of Amazon. People don’t go shopping anymore. They buy stuff online. A lot of shops. I mean, not a lot. All shops have overheads. They have to charge more. They have to pay for their electricity, their rent, their staff, things like that. Those are overheads that Amazon doesn’t have. So, Amazon can charge less than a regular shop can. And shops cannot compete with Amazon. And in the end, they close down. Another thing that Amazon has done is Amazon can use its power to close people down. For example, there’s a Web site, diapers.com. And Amazon wanted to buy that Web site quite a while ago. And they didn’t want to sell it. They didn’t want to sell the Web site, of course. So what Amazon did is Amazon on its site, sitewide, it reduced the cost of all of its diapers by a huge amount. So, the diapers on Amazon were far cheaper than diapers, on diapers.com, and the two companies went head to head. And of course, Amazon has a huge pot of money, a huge pool of resources. Amazon just kept its prices low. Amazon can lose money for quite a long time before it starts to hurt. Diapers.com couldn’t. And in the end, diapers.com said, “all right, we give up. Hands up.” And they sold their business to Amazon.com. So, Amazon can shut people down by using their power.
Working conditions. I don’t know if all this is actually true, but Amazon use robotics. They use a lot of A.I. They’re trying to automate the process as much as possible. Some things they can’t do. Like some of the packing and box stuffing and stuff have to be done by people. But even the people they’re trying to automate. People have trackers on their wrists and they have to get to a certain point by a set time and load a certain box. And I read somewhere that Amazon workers walk an average of about 20 kilometers a day and they’re kind of treated like robots. But I think Amazon’s goal for the future is to eliminate people entirely from their warehouses and make the process of packing completely automated. And I wouldn’t be surprised if that happens in the relatively near future.
OK. I’ve gone way over time, but let’s have a quick look at the future. So, Amazon is currently bringing out a few new things. There’s Amazon Go, which is a cashierless supermarket. What you do there is when you walk in, you have the Amazon app on your phone and the shop recognizes you as you walk in. There are cameras everywhere. There are scales on the shelves. If you take something off the shelf, the cameras know who you are. The cameras can see what you’ve taken and the shelf can register that something has been taken from it. And if you put it back on the shelf, it realizes you put it back and you put that in your bag. And once you leave the shop, you’re automatically charged to your Amazon account. You don’t have to do anything. You can walk in. You can grab a drink and walk out. That’s it. And you’ve paid for it. Now, that’s good and bad. I mean, it’s obviously cutting jobs, but it’s also making shopping easier. However, with services like that, it’s also far easier to spend more than you intend to. If you actually have a physical interaction with some people, you can realize how much money you’re using. But if it’s all magic money, credit cards, then you don’t realize how much you’re spending. So that’s good and bad. Amazon is bringing in Amazon carts because Amazon go is just one kind of shop but Amazon carts you could put in any kind of supermarket. It does the same kind of thing. When you put something in the shopping cart, it realizes what’s in there and it charges you. So, again, you can cut out waiting in line to pay for stuff.
Amazon Prime Air. Amazon is trying to deliver things by drone. Amazon wants to make your shopping experience as easy as possible, as convenient as possible. And one thing Amazon cannot compete with regular shops with is speed. If you go to a shop, you can buy the thing, you can get it there and then. Amazon, obviously, you have to wait for it to be delivered. So, Amazon wants to speed up the delivery process and to do that they’re using drones. Amazon drones are going to become a big thing soon.
Amazon robotics. Amazon has a robotics industry. They use robots in their warehouses. They’re making cleaning robots, medical robots, a lot of different types of robots. There’s Alexa, of course. Alexa is your home app thing. It’s a home smart center. And you can get a lot of different things that connect to Alexa now. We have the IoT, the Internet of Things. There are many things in your house that you can connect to Alexa. That’s really good. The house is becoming smart. We can connect everything to Alexa. But of course, Amazon is not doing it to help you in your house. Amazon is … Amazon is doing it so that when you purchase something, you’re more likely to purchase it from Amazon. Everything is connected to Amazon.
So, let’s just have a quick look at what is Amazon? Is Amazon a shop? Well, I suppose it is on the surface, but obviously the amount of money to be made from selling stuff will … is finite. You cannot just keep selling stuff forever. There’s a finite amount. So, Amazon is trying to branch out into other industries. Right now, Amazon has its cloud. It has its Web service. Amazon has contracts with the American government to store data. Amazon is bringing out face recognition software. But that’s also used in Amazon go shops, of course, that’s how they know who you are. But they were going to sell that to the government. But I think that’s been postponed at the moment. They were also trying to get a contract with the CIA. But again, that has also fallen through, I think. But Amazon is trying to spread out into other areas. They want to become basically a data organization. I think.
So, a final thought for you. Amazon can hear you through its Alexa or through your phone. Amazon knows the layout of your house. It knows what devices you have in your house. Amazon knows what you want. It knows what you have bought. It knows the things you need. It knows your schedule. It knows when you fill the bath. Or switch the lights on. It knows when you’re running out of milk. It knows what you look like. It can see your face. It knows where you are, through GPS tracking. It’s developing AI. It has a lot of your data. It has connections to the CIA and the American government. And it can shut down the competition. Amazon is more than a shop. What is Amazon going to become in the future? There’s no way of knowing, but I think Amazon is going to become much larger in all of our lives.
Anyway, that was way more than 10 minutes talking about Amazon. Hope you learned something. Don’t forget, if you go to my Web site, you can answer some questions about this. You can try and write some essays and you can work on your English. All right. I’ll talk to you next time. Bye.