Amazon online Retail Toys Store – SWOT Analysis

The toys industry is a very prominent retail market in the world. There are exclusive toys stores like ToysRus across the world, exclusive toys section in all retail chains like Walmart, Target and Aeon.   The market is disrupted by proliferation of online shopping options like Amazon, eBay, Rakuten and Alibaba.  The most popular retail chain, ToysRus bankrupted recently due to the disruptions from the online retail market.  This SWOT analysis covers strength, Weakness, Threats and opportunities of Amazon online retail store for Toys.

Strength:

The strength of the Amazon online shopping is its brand name itself. Amazon revolutionized the online shopping experience through its wide verity of products, customer experience and worldwide reach with the support of a strong digital ecommerce platform. Amazon also directly operates its own unique stores in major cities. They have plenty of resellers in the market place who compete each other to sell their product which can disrupt the retail stores as well as other online shopping companies.

Weakness:

The online business is very price sensitive. There are many regional players in the market like Rakuten in Japan, eBay in US, Alibaba in China and FlipKart in India has much more reach to the regional customers. This creates a lot of competition in market affecting the margin. Amazon is also struggling to tackle the regulatory requirements in certain markets like China. Ontime delivery and reach to the rural area are other weaknesses. For example, Amazon is covering only major cities and is unable to reach the mass population who resides in the rural areas.

Threats: The retail stores can provide a better customer experience as customers can feel the toys and buy it immediately. There is no wait time or delivery challenges. There are many online market players who can provide personalized toys by 3D printing and the market is going towards personalization. Amazon must compete against resellers in their own market place and against other online shopping companies.  We can see different prices for the same product within and outside the Amazon market place. For example, a price of an HP laptop might be different when

it sell by Amazon direct and by a reseller in the amazon market place, same laptop has a different price point in Bestbuy or eBay.

Opportunities:

Personalized toy selling is a big opportunity going forward due to the proliferation of additive manufacturing in other words, 3D printing. For example, there are many online marketplaces which print toys based on the customers design and ship it to them. Amazon piloted its own grocery stores and it can be extended for selling toys as well or they can open exclusive stores. When the direct market is shrinking, it can give an opportunity for acquiring retail chains as well to kill the competition. The technological advancement like delivery using drones can ensure just on time delivery and improve the customer experience. For example, Amazone already piloted Drone based delivery in multiple cities.