Is AMZN Stock on the Verge of Another Rally?
Amazon.com, Inc. (NASDAQ:AMZN) is not a company that likes to make a big fuss about everything. Slowly but steadily, it has transformed itself from an online bookstore to the leader of e-commerce. Not surprisingly, AMZN stock also soared through the roof. Now, the company is expanding its presence into the next big industry in tech. At its current rate of progress, another surge in Amazon stock could be right around the corner.
Remember when Amazon first launched one-click buying on its e-commerce platform? It allowed online shoppers to skip the shopping cart and the inputting of shipping and billing information. With just one click, the purchasing process is done. Amazon even received a patent from the U.S. Patent and Trademark Office for this technique back in 1999. (Source: “Method and System for Placing a Purchase Order Via a Communications Network,” U.S. Patent and Trademark Office, September 28, 1999.)
Of course, the feature has its drawbacks. If you recently moved and forgot to change your shipping information, you better cancel that order quickly; otherwise, the one-click order would send the item directly to your old address. Still, for the most part, it offered consumers more convenience.
For Amazon, one-click buying gave a huge boost to its e-commerce business. Consider when you are going through the order process and wondering, “Hmm, should I be buying this right now?” Well, with one-click buying, you don’t get a chance to ask that question.
That means more business for Amazon.
After tremendous growth in gross merchandise volume (GMV) and Amazon’s stock price, the company has taken the one-click process to a whole new level. Last year, Amazon introduced the “Dash Button,” a small physical button that allows you to order a specific product even faster.
Each Dash Button is labeled with the name of a product. You can configure the button to order a specific product and quantity. The button can be placed on the fridge, near the washing machine, or wherever it’s most convenient for consumers.
The best part is that consumers don’t need a computer, a tablet, or a smartphone to use it. Just press the Amazon Dash Button labeled with Tide, and your laundry detergent is on its way.
This no doubt brings more convenience to consumers’ lives. For example, what about when you are changing your baby at 3:00 a.m. and realize that your diapers are running low. Instead of adding “diapers” to your shopping list or having to run out for more in the morning, just press your Huggies Dash Button, which is right next to your change table, and they’ll be on their way.
Today, there are more than 100 Dash Buttons available, representing thousands of products from top-name brands. (Source: “More Than 100 Amazon Dash Buttons Now Available, Giving Prime Members the Easiest Way to Order Thousands of Products,” Amazon.com, Inc., March 31, 2016.)
And if pressing a button is still not easy enough for you, Amazon also rolled out its “Dash Replenishment Service” (DRS). Basically, the service allows connected devices in your home to automatically order goods directly from Amazon when you’re getting low.
At first glance, it seems like overkill. I mean, how hard is it to actually press a button? However, when you realize that some things are less observable than others when they are running low, you’d see that DRS makes perfect sense.
Toner levels in your printer would be a perfect example. If you sign up for Amazon DRS through Samsung’s “Mobile Print” app, the printer would be able to order a new toner cartridge from Amazon before the existing one runs out. (Source: “Amazon Dash Keeps Your Samsung Printer From Running Out of Ink,” Maximum PC, February 23, 2016.)
Another example would be the filters in your water pitcher. In February, Amazon partnered with Brita and launched the “Brita Infinity” pitcher, a Wi-Fi–enabled appliance with a built-in counter that tracks the amount of water passing through the filter. Once the existing filter nears its capacity, the Brita Infinity pitcher orders a new one from Amazon. (Source: “Brita, Amazon Team Up to Introduce First ‘Smart’ Pitcher,” Amazon.com, Inc., February 29, 2016.)
The Bottom Line on AMZN Stock
From the company’s perspective, the Amazon Dash Button and Dash Replenishment Service could be huge catalysts to its e-commerce business. In a broader sense, they are also connected devices that could mark the beginning of the “Internet of Things” (IoT) era.
Let’s not forget that Amazon is also building an infrastructure powering all IoT devices through its “Amazon Web Services” (AWS) IoT platform. With that in mind, it’s safe to say that the best could be yet to come for AMZN stock.