Amazon And UPS Are Betting This Electric Aircraft Startup Will Change Shipping

Harvard grad and former pro hockey player Kyle Clark’s startup Beta is on the verge of bringing workhorse battery-powered cargo planes to America’s skies that can take off and land like helicopters.

When he played minor league hockey in the early 2000s, Kyle Clark says his teammates would spend the long bus rides talking about the drugs they’d taken last night and who’d brought a hooker into their hotel room. Clark, a bruising 6-foot-6 enforcer, would bury his nose in textbooks on how to build airplanes. Pretty nerdy – but he’d even stood out as an engineering egghead in the locker room at Harvard, where his teammates had nicknamed him Beta.

Clark never made the NHL, but 20 years later, his startup Beta Technologies is valued at a billion dollars and is on the cusp of making the major leagues with Alia, a potentially groundbreaking electric aircraft.

Alia, whose gracefully angled 50-foot wingspan Clark says was inspired by the long-flying Arctic tern, is one of a slew of novel electric aircraft that aviation upstarts are building that take off and land vertically like a helicopter.

Virtually all of Beta’s competitors, including billionaire Larry Page’s Kitty Hawk and the SPAC cash-rich Joby Aviation, aim to transport people, enabling urbanites to hopscotch over traffic-snarled city streets. But Clark designed Alia primarily as a cargo aircraft, betting that a big market will develop for speeding ecommerce to and from suburban warehouses long before air taxis are considered safe to allow over city streets.

“We’re actually going to win at the passenger game because by the time others are doing passenger missions we will have thousands of aircraft, millions of flight hours and a safe, reliable, vetted design,” says the 41-year-old Clark, whose company is based in his hometown of Burlington, Vermont.

Clark is also spooling up what he thinks will be a lucrative second business: charging stations for electric aircraft of all types that he plans to dot around the country to create the aviation equivalent of Tesla’s supercharger network. There are nine up and running already, in a line from Vermont to Arkansas, with another 51 under construction or in the permitting process.

Most will contain banks of used batteries from Alia aircraft, removed when their capacity has declined about 8%, giving them a profitable second life while Beta sells Alia owners replacement packs at about a half a million a pop. Equipping the charging stations with battery storage will avoid the need for expensive upgrades to the local power grid: Clark’s plan is for them to fill slowly at off-peak times, while unneeded power can be sold back at peak to utilities.

“The aircraft is the sexy part but we’re going to make big money off batteries,” says Clark.

Beta investors Fidelity Management and Amazon are hoping the company will repeat the success of another electric vehicle startup they’ve bankrolled whose market cap recently topped $100 billion. “They see a lot of parallels between Beta and Rivian,” says Edward Eppler, a former Goldman Sachs investment banker who joined Beta as CFO after working on its Series A round, which raised $368 million in May at a $1.4 billion valuation. Forbes estimates Beta’s revenue over the past 12 months at $15 million, mostly from U.S. Air Force research contracts.

The cash infusion came a month after Beta won a big endorsement from UPS. Big Brown inked a letter of intent to buy up to 150 Alia aircraft, whose price is expected to fall between $4 million and $5 million apiece. Beta executives are hoping that an order will be forthcoming from Amazon, too, with both the giants looking for ways to make good on pledges to slash carbon emissions from their package delivery operations.

Beta aims to start delivering UPS’ first 10 aircraft in 2024 – assuming it wins safety certification for Alia by then from the Federal Aviation Administration. If not, the U.S. Air Force could end up fielding Alia first: Beta has won contracts worth $43.6 million to test out Alia for military use. In May, Alia became the first electric aircraft to win airworthiness approval from the Air Force for manned flight.

Beta says Alia’s bulbous cabin will be able to carry 600 pounds of payload, including the pilot, a maximum 250 nautical miles — at least 100 miles farther than any competitors that have prototypes in the air — or up to 1,250 pounds for 200 miles with one of the five battery packs removed. Clark expects FAA reserve requirements to restrict flights to 125 miles.

But given Alia’s high price – roughly double a similarly sized new Cessna Grand Caravan and up to five times the used planes that dominate small cargo fleets – Beta and UPS know Alia will only make economic sense if it flies a lot. That will require a radical reshaping of delivery networks away from the longtime hub and spoke pattern under which cargo planes typically make just one roundtrip per day, funneling packages from a local airport to a sorting center.

Instead, they envision Alia flying directly from one UPS warehouse to another – cutting out truck trips as well as plane flights — and eventually straight to large customers. Frequent flying will allow savings as lower operating costs kick in. Beta promises 90% savings on fuel and cheaper maintenance due to the fewer parts of electric propulsion systems — plus a fat 35% reduction if computers eventually bump pilots from the cockpit altogether.

Clark, a heavily tattooed dynamo who rises at 4 a.m. and says he can always find a late hour to work on motorcycles or his own airplanes, grew up outside Burlington obsessed with sports and flight. He was a star athlete at Essex High School, captaining the football, lacrosse and hockey teams. His wife, Katie, whom he met in 7th grade, says when Clark was invited to parties, he’d usually beg off to go home and build model airplanes.

Clark honed his grease monkey skills helping mechanics at a local airport in return for plane rides. When he set out to build an ultralight airplane from a kit, his mother, fearing he would kill himself, built a backyard bonfire and burned the parts.

Clark finally got in the pilot’s seat when the Washington Capitals signed him during his junior year at Harvard: He used the contract bonus to take flying lessons while playing on farm teams in Richmond, Va., and Portland, Maine.

Returning to Harvard after two years, for his senior project, Clark designed a flight control system for a single-person aircraft based on a motorcycle seat and handlebars. Failing to find investors to develop the plane, Clark started a business in 2005 building power supply equipment in his mother-in-law’s garage. In 2010, he sold that company to Dynapower, a Vermont power equipment manufacturer, and became its director of engineering, helping develop systems used in Tesla’s commercial energy storage offering, Powerpack.

After a private-equity group scooped up Dynapower in 2012, Clark found himself armed with a little cash. He motorcycled up and down the East Coast trying again to sell investors on his airplane design. With no takers, he cofounded a social-networking platform in 2014 that connected startups with talent and capital, hoping to use it as a springboard for his own plans.

But it isn’t to the Internet that Beta owes its existence; it’s to the iconoclastic biotech entrepreneur Martine Rothblatt.  After becoming wealthy from founding Sirius Satellite Radio, Rothblatt started a biotech, United Therapeutics, in 1996 to develop a treatment to save her daughter from a lung ailment. The drug worked, but at some point her daughter will still need a lung transplant. That motivated Rothblatt to make an audacious effort to solve the chronic shortfall in organs for transplantation: She’s developing artificial ones.

Electric vertical takeoff and landing (eVTOL) aircraft are the perfect solution to quickly — and greenly — get the perishable organs to hospital helipads. She contracted with the helicopter company Piasecki to develop one to her specifications, but at a 2017 meeting with subcontractors, she says she was deeply impressed by Clark, whom Piasecki had hired to build the electric power systems.

“I’ve been in countless technical presentations,” says Rothblatt. “I immediately saw that this guy was like a 99th percentile expert.”For customer United Therapeutics, Beta has developed a more elaborate version of its charging station with a landing deck atop modular metal container-like rooms that can be configured as crew rest quarters, mission planning space or storage units.

Discovering Clark lived near her vacation home in Vermont, she invited him over. What was supposed to be a 30-minute coffee became an all-day hangout, with Clark driving her to Montreal for previously scheduled meetings. She decided he was the right person to build the whole aircraft. She gave him $52 million to get Beta started, and has ordered 60 aircraft and eight charging stations.

“You get to tell by spending time with somebody face to face… who will smash down a wall to achieve success and who will just give you excuses,” says Rothblatt. “Kyle was equal to the best executive that I had ever worked with in my life before he’d done anything for me.”

In just eight months, Clark’s small team built and flew Ava, a test mule for key subsystems. Starting with the fuselage of a Lancair plane, they skewered the nose and tail with tilting shafts bearing four pairs of counter-rotating propellers that earned Ava comparisons to Edward Scissorhands.

At 4,000 pounds, it was the largest electric aircraft by weight to date to achieve a vertical takeoff and landing. But along with its successes, it led Clark to conclude that tilting rotors – which many of his competitors are using — were a mistake, adding weight and complexity that threaten to make safety certification more difficult.

Alia, which he began work on in summer 2018, has separate systems for lift and cruise: a pusher propeller at the rear for forward flight, and to take off and land vertically, four propellers mounted atop two booms bisecting its wings. Those long, high wings optimize it for long-distance flight. He says it’s such an efficient glider that if power were lost at 8,000 feet it would smoothly – and safely — descend for about 10 minutes.

And the placement of its 3,300 pounds of batteries at the bottom of the aircraft, counterbalancing the wings, makes Alia inherently stable, in stark comparison to tiltrotors. The simpler design means that Alia’s core flight control program contains only 1,200 lines of code, says Clark; tiltrotors need millions of lines of software.

Observers raise two safety concerns: If it lost one of its four lift propellers, Alia would become difficult to control in vertical mode, and placing the batteries in the belly could pose a fire risk to passengers above. Clark says the passenger compartment floor will have titanium shielding and that losing a lift prop is unlikely – each has four redundant motors.

But regulatory risk is high. After all, the FAA has yet to certify even a conventional airplane with an electric propulsion system, let alone a vertical takeoff and landing one. Clark and Rothblatt’s conviction is that keeping the aircraft as simple as possible is key but it’s anyone’s guess as to how much time it will take the agency to assess Alia’s novel technology – or whether they’ll require modifications that sap its performance. Even Beta true believer Rothblatt is hedging her bets by backing the development of two simpler aircraft: a helicopter retrofitted with an electric propulsion system and a large drone from the Nasdaq-listed Chinese company EHang.

Black images of flying unicorns adorn windows at Beta’s headquarters at Burlington Airport. It’s not a joke about Beta’s status as a billion-dollar aircraft startup. The tail numbers on the two Alia prototypes are N250UT and 251UT, for United Therapeutics and Rothblatt’s stipulation of 250-mile range.

When identifying the aircraft to air traffic controllers, the last two letters should be pronounced as “Uniform Tango” by aviation convention, but to annoy her husband when handling comms during flight tests, Katie Clark took to saying “Unicorn Tango.”

Clark follows two unusual strategies in running Beta: he’s aiming for a flat structure without titles where young engineers feel free to challenge older ones – and he wants everyone to learn to fly.

He gives his 350 employees free lessons in Beta’s motley fleet of 20 airplanes and helicopters, including humdrum Cessna 172 trainers, an Extra aerobatic plane, a World War II Boeing-Stearman biplane and a 1940 Piper Cub.

Many employees have no prior aerospace experience. Getting familiar with aircraft through flying helps them better design aircraft systems, as well as fosters a love of flight that Clark says is more motivating than bonuses. Investors have questioned the expense, but Clark is standing firm. “The sheer passion of when people give a shit is worth more than anything,” he says.

Beta’s investors also would prefer if Clark didn’t insist on being Alia’s test pilot – or burn off steam by doing barrel rolls in the aerobatic plane – as would his wife. Clark says it’s who he is. And he insists that flying Alia himself – which he claims has had no hard landings or crashes – gives him direct insight into whether design tweaks are working and how customers will experience it.

“Are we going to crash a plane or a helicopter? Of course it’s going to happen,” says Clark. “It’s the reality of bringing a new technology to market. The world’s going to be a better place for what we bring, and that takes risks.”

THE POWER THEY NEED TO SUCCEED

A key problem for eVTOL aircraft is the weight of batteries, which contain 14 times less energy by weight than aviation fuel. To achieve their range and payload goals, Beta, Joby Aviation and Kitty Hawk appear to need battery packs with energy densities at the outer range of the newest technologies, while Lilium is way out in experimental territory, according to battery experts Venkat Viswanathan and Shashank Sripad of Carnegie Mellon University.

Batteries are evaluated by two key metrics: specific energy, which is the amount of energy they contain for a given weight; and specific power, a measure of how much energy the battery can discharge at once for a given weight. In a recent paper, Viswanathan and Sripad estimated the pack-level specific energy requirements for five eVTOLs assuming an empty weight fraction of 0.5

(That’s the share of the maximum takeoff weight that’s taken up by the airframe, avionics and other onboard systems). The lower the empty weight fraction, i.e. the lighter the structure, the more room there is for batteries, meaning their specific energy doesn’t need to be as high. The bars to the sides of each square show how much the specific energy requirement varies at empty weight fractions between 0.45 to 0.55.

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Source: Amazon And UPS Are Betting This Electric Aircraft Startup Will Change Shipping

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Amazon And Walmart Slug It Out For Retail Supremacy As Pandemic Boosts Sales For Both Giants

In 2020, the pandemic provided a powerful sales boost for both of retail’s two biggest companies. Walmart’s WMT +0.9% annual revenue last year rose 6.7% to $559.15 billion. It was the fastest top line growth in 12 years, and kept the Bentonville, Ark.-based behemoth in first place among the entire Global 2000 for total sales.

The surge was even stronger for Amazon.com AMZN +1.9%, which saw sales soar 37.6% to $386.06 billion in 2020, the second highest of any Global 2000 company on this year’s list. The jump was Seattle-based Amazon’s biggest year-over-year percentage revenue increase since 2011.

Walmart for now has the highest sales of any company in the Global 2000, but Amazon, currently ranked second, should overtake Walmart in revenue by the end of next year, according to analysts’ forecasts. Amazon’s overall Global 2000 ranking is already ahead of Walmart’s (No. 10 vs. No 18), and one three of the four criteria considered for company size: profits (No. 16 vs. No. 34); assets (No. 129 vs. No. 160); and market value (No. 4 vs. No. 17).

Thanks to buoyancy in its stock price, Amazon in 2020 became a trillion-dollar company by market capitalization. Amazon shares gained 41% for the year ending April 16, more than five times Walmart’s 8% return, and its $1.71 trillion market value is more than quadruple Walmart’s $396 billion.

The two titans of retail often battle to win business from the other, like in the lucrative grocery business, where Walmart enjoys a nearly 20% market share compared to 2% for Amazon, which owns the Whole Foods WFM 0.0% grocery chain. Walmart’s lead is under assault from Amazon and from local grocery stores using services like Instacart to leaning more heavily into online sales.

One initiative literally bearing fruit for Amazon is its growing number of Amazon Fresh AMZN +1.9% locations set up to peddle perishable products to grocery shoppers in a brick-and-mortar store. Walmart for its part is not standing still and expanding its presence in the online channel where sales surged 79% last year.

The third biggest retailer in the Global 2000 is China’s e-commerce giant, Alibaba Group Holding Ltd., which outranks both Amazon and Walmart in terms of profit, and whose market value of $658 billion exceeds that of Walmart. Overall, it’s the 23rd biggest company in the Global 2000. Although Alibaba is the heavyweight of online commerce in China, competition is fierce with rivals like JD.com, the world’s sixth biggest retailer with an overall rank in 2021 of No. 101, up sharply from No. 238 last year.

Business was brisk in 2020 for home improvement retailers, as both Home Depot HD -0.6% and Lowe’s moved up in overall ranking. The pandemic also helped to propel some new names from the retail world into the Global 2000, including Williams-Sonoma WSM +2.5% (No. 1319), Dick’s Sporting Goods DKS +3.4% (No. 1848), and Big Lots BIG +3.5% (No. 1848).

I am the deputy editor of investing content for Forbes Media. I’m responsible for money and investing coverage on Forbes.com and in Forbes magazine. As editor of the Forbes Dividend Investor newsletter service, I send out two dividend stock recommendations per week and send out weekly updates with the best 25 current buys. I’m also a Senior Editor for Forbes Newsletter Group, including its virtual events business, Forbes iConferences. Prior to joining the company, I spent five years with CNN Financial News working with Lou Dobbs, where I produced long-form pieces and reported on management, entrepreneurship and financial markets. I’ve also worked for Bloomberg TV and Inc. Magazine.

Source: Amazon And Walmart Slug It Out For Retail Supremacy As Pandemic Boosts Sales For Both Giants

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Amazon Facing Calls From Civil Rights Groups To Permanently Ban Police Use Of Facial Recognition As Deadline Approaches

Amazon

Civil rights groups are calling on Amazon to permanently ban use of its facial recognition software, as an approaching deadline looms on the future of the technology.

In an open letter addressed to Amazon CEO Jeff Bezos and incoming CEO Andy Jassy, 44 civil rights groups pointed to ongoing instances of police violence against the Black community as evidence that Amazon should stop selling facial recognition technology to law enforcement. “As a company, Amazon has a choice to make: Will you continue to profit from selling surveillance technology to law enforcement? Or will you stand for Black lives and divest from giving law enforcement these harmful tools?” said the letter, which was published Monday.

After national protests that followed the death of George Floyd last year, Amazon followed Microsoft and IBM in stopping the sale of its facial recognition technology to law enforcement. However, unlike IBM, which abandoned its program, and Microsoft, which indefinitely suspended police use of its facial recognition until a federal law is introduced, Amazon opted to impose a one-year ban to  “give Congress enough time to implement appropriate rules” to govern the use of the technology.

While some cities have imposed bans on facial recognition technology being used by police departments, the technology isn’t regulated by federal authorities. Amazon has yet to say whether it will continue its moratorium after it expires next month, or lift the ban and sell the technology to law enforcement.

“They did share that they are committed to standing with the Black community and standing for racial justice,” says Jennifer Lee, technology and liberty project manager at the ACLU in Washington State, where Amazon is headquartered. “If they’re going to do that they need to permanently divest from selling facial recognition technology and cease involvement with police and law enforcement.”

Amazon didn’t respond to requests for comment. However, the Seattle-based giant is pushing against shareholder calls for more transparency around the use of its facial recognition software, called Rekognition.

Ahead of the company’s annual general meeting on May 26, one shareholder proposal is calling for an independent third-party audit on the risks linked with government use of Rekognition, citing calls of more than 70 civil rights organizations to stop selling the technology, who said it contributed to “government surveillance infrastructure.” Another shareholder proposal is calling for an independent report on how Amazon conducts due diligence on its customers, including law enforcement agencies that use Rekognition.

In a proxy memo filed with the Securities and Exchange Commission, Amazon said that it has “conscientiously acted to review and address the concerns expressed in the proposal and transparently provided information regarding our actions to the public” and that it is actively engaged in policy debates around facial recognition regulation.

Amazon introduced Rekognition, a cloud-based technology that uses artificial intelligence and machine learning to identify people and objects in photos and video, in 2016. But the technology became a lightning rod for civil rights groups and anti-surveillance advocates after researchers at MIT found it identified gender of certain ethnicities less accurately than similar products made by Microsoft and IBM.

(Amazon said the MIT findings were “misleading and drawing on false conclusions” and asserted that its own tests had found no such inaccuracies.) After it was revealed the company pitched the software to the Immigration and Customs Enforcement agency, hundreds of Amazon employees sent an internal letter to CEO Jeff Bezos stating that they “refuse to contribute to tools that violate human rights.”

The heightened awareness around racial equality and concerns about police surveillance are making such shareholder proposals harder to ignore for institutional investors. Glass Lewis, a proxy advisory firm, issued a report last week recommending investors vote in favor of both shareholder proposals about Rekognition, given the previous controversies linked to the software, and the fact that no federal regulations appear set to pass before the moratorium passes.

“We have to draft these proposals in a way to get them on the ballot, so we go with a softer approach,” says Brianna Harrington, shareholder Advocacy Coordinator at Harrington Investments, which is bringing the proposal calling for an audit of risks linked to government use of Rekognition. “In a perfect world they’d stop selling the technology.”

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I’m a staff reporter at Forbes covering tech companies. I previously reported for The Real Deal, where I covered WeWork, real estate tech startups and commercial real estate. As a freelancer, I’ve also written for The New York Times, Associated Press and other outlets. I’m a graduate of Columbia Journalism School, where I was a Toni Stabile Investigative Fellow. Before arriving in the U.S., I was a police reporter in Australia. Follow me on Twitter at @davidjeans2 and email me at djeans@forbes.com

Source: Amazon Facing Calls From Civil Rights Groups To Permanently Ban Police Use Of Facial Recognition As Deadline Approaches

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In July 2018, the A.C.L.U. ran a study that it said matched the headshots of 28 members of Congress to mugshots of known criminals. A secondary test performed by the M.I.T. Media Lab in January 2019 and reported by The New York Times found that Recognition had a hard time identifying female faces and the faces of dark-skinned individuals. Representatives from Amazon, however, pushed back against those claims, saying both the A.C.L.U. and M.I.T. Media Lab studies didn’t use the Recognition technology properly.

The company also issued a lengthy response statement on how it uses Recognition. Lawmakers and other tech companies, though, are calling for greater oversight over the technology. The response to facial recognition Ahead of Amazon’s shareholders meeting, the San Francisco Board of Supervisors voted to ban the use of facial recognition technology by law enforcement groups, while Massachusetts currently has a bill seeking to put a moratorium on the tech in committee.

Microsoft (MSFT) President Brad Smith has said that his company rejected the sale of its own facial recognition technology to a police department out of fear that it would disproportionately impact women and minorities. Smith said that the technology had primarily been trained with white males, and, as a result, wouldn’t have been accurate. The company also denied the sale of its tech to a foreign country. Google (GOOG, GOOGL), meanwhile, has chosen not to sell its technology at all. For more on Yahoo Finance’s and Dan Howley’s coverage of this story please click: https://finance.yahoo.com/news/amazon…

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Amazon Turns Up The Heat On Brick-And-Mortar Retailers With New Online Pharmacy

Amazon has turned up the heat on its brick-and-mortar competition Tuesday with the launch of an online pharmacy, which will deliver prescription medications to its U.S. customers and offer hefty discounts for those paying without insurance.

Key Facts

The company said that Amazon Pharmacy, a dedicated section of its website, will make sure that “filling prescriptions is as convenient as any other purchase on Amazon’s online store.”

The service will be available to U.S. consumers from Tuesday, and will allow them to easily compare prices between insurance and non-insurance options, both of which can be used. 

Members of Amazon Prime, the company’s subscription service, will be able to access sizable discounts if not paying with insurance — up to 80% on generic medicines and up to 40% on branded — both on Amazon’s site and in more than 50,000 participating pharmacies around the country. 

PROMOTED Jumio BrandVoice | Paid Program Why Digital Onboarding And EKYC Are Key To The Insurance Sector’s Success Japan BrandVoice | Paid Program Japan Is Using Robots As A Service To Fight Coronavirus And For Better Quality Of Life Mitsubishi Heavy Industries BrandVoice | Paid Program What Does It Mean That America Is A Net Exporter of LNG?

The pharmacy offering expands upon Amazon’s acquisition of PillPack two years ago, which offers services to those managing multiple daily medications for chronic conditions and will remain open to those that need it. 

Key Background 

While Amazon has managed to crack, and often dominate, most retail markets, the lucrative one for prescription pharmaceuticals has remained elusive. In 2018, it signalled its intent to close that gap, acquiring the small online pharmacy PillPack, a move that didn’t seem to shake competitors at the time, with Walgreens CEO saying the company was “not particularly worried” about the deal. Perhaps competitors shall worry today, with pharmacy stocks tumbling after the announcement and as consumers, as Amazon points out in its announcement, conduct more and more of their business from home in the midst of the Covid-19 pandemic.   

Further Reading

Amazon Pharmacy Business Adds Online Store, Free Delivery For Prime Members (Forbes)

The inside story of why Amazon bought PillPack in its effort to crack the $500 billion prescription market (CNBC) Follow me on Twitter. Send me a secure tip

Robert Hart

Robert Hart

I am a London-based reporter for Forbes covering breaking news. Previously, I have worked as a reporter for a specialist legal publication covering big data and as a freelance journalist and policy analyst covering science, tech and health. I have a master’s degree in Biological Natural Sciences and a master’s degree in the History and Philosophy of Science from the University of Cambridge. Follow me on Twitter @theroberthart or email me at rhart@forbes.com 

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CNBC Television

Amazon is entering the pharmacy business with a new offering called Amazon Pharmacy, allowing customers in the United States to order prescription medications for home delivery, including free delivery for Amazon Prime members. CNBC’s Bertha Coombs reports. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi Amazon is entering the pharmacy business with a new offering called Amazon Pharmacy, allowing customers in the United States to order prescription medications for home delivery, including free delivery for Amazon Prime members.

Amazon has been quietly building out its pharmacy offering for several years after ramping up internal discussions in 2017 and acquiring PillPack in 2018. The pharmacy space is notoriously complex and competitive in the U.S., and Amazon Pharmacy is built in part on PillPack’s infrastructure, including its pharmacy software, fulfillment centers and relationships with health plans. Amazon Pharmacy, announced Tuesday, is the company’s biggest push yet into $300 billion market, and threatens the dominance of traditional pharmacies like CVS and Walgreens, as well as other large retailers that offer pharmacy services, including Walmart.

Pharmacy stocks tumbled following the launch of Amazon Pharmacy. CVS shares fell 8.6% on Tuesday. Walgreens Boots Alliance dropped 9.6%. Shares of Rite Aid slid 16.2%. GoodRx, which helps consumers find discounts on prescription drugs, fell 22.5%. Amazon shares closed slightly higher. For Amazon, the announcement is well timed. Americans are increasingly relying on getting their medicines via mail to avoid possible exposure to the coronavirus. That shift could be permanent, as more people than ever before are learning about new ways of receiving medication. “We wanted to make it easy for people to get their medication, understand the cost and get it delivered to the home,” said TJ Parker, Amazon’s vice president of pharmacy, who previously co-founded PillPack.

“The hard work is to make it easy … there were a number of complications behind the scenes.” “We think this new benefit will add tremendous value to our members,” added Jamil Ghani, vice president of Amazon Prime. “It’s relevant as folks try to do more from the comfort and safety of their homes.” » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-n… Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBChttps://www.cnbc.com/select/best-cred…

Amazon Has Finally Met Its Match

If there was a “stock of the century” award, Amazon (AMZN) would be the favorite. Since 2001, AMZN has rocketed above $3,300, turning every $1,000 into just shy of $600,000.Obviously, anyone who got into Amazon early and held on is living the high life and deserves a round of applause. But now, it’s time to come to terms with a sad truth: Amazon’s glory days are over.

Because it has finally met its match. And it’s all because of one simple reason: It finally has legitimate competition.

Below, I’ll show you the three companies—what I call the “anti-Amazon” alliance—all coming for Amazon’s throat. All are rapidly stealing key parts of Amazon’s business. And all will prove to be much better investments in the coming years… Recommended For You

There’s a New Challenger to Amazon Prime

Longtime RiskHedge readers know Walmart (WMT) is one of my favorite stocks on the planet. Walmart is America’s largest retailer. It sold more than half a trillion dollars-worth of goods through its stores last year!

And its new “secret weapon” Walmart+ could dethrone Amazon’s online dominance. Amazon launched its wildly popular Prime delivery service 15 years ago. Today there are more Prime subscribers than there are full-time workers in America!

Creating an “everyday goods” subscription with free delivery was genius. Why would members ever shop anywhere else when they can click a button and have practically anything show up on their doorstep in two days? In short, Prime transformed Amazon from an $18 billion internet retailer into a $1.5 trillion beast.

Walmart+ is a total game-changer. Walmart will sell over $75 billion-worth of goods through Walmart.com this year. In fact, it’s overtaken eBay to become America’s second-largest online seller.

The thing is, roughly 90% of sales still happen in-store. Walmart+ is going to transform Walmart into a true online behemoth.

The subscription will cost $98 a year, and include perks like unlimited same-day delivery, access to its new two-hour delivery offering, and discounts on fuel at Walmart gas stations. Clicking a button on Walmart.com and having groceries and other items show up on your doorstep the same day is huge.

Leading market research firm NPD Group tracks millions of online and in-store receipts. And its research shows 95% of US consumers shopped at a Walmart store last year. That’s roughly 225 million people.

I expect at least 10% of consumers will jump at the chance to sign up for Walmart+. And once these folks are “locked in,” they won’t want to shop anywhere else. In short, this will add hundreds of billions of dollars to Walmart’s value over the coming years. I believe the stock will double over the next 18 months.

An Army of Small Businesses Are Moving Online

Shopify (SHOP) is what I call the “anti-Amazon.” It helps entrepreneurs create and manage their own online stores.

Think of Shopify like an invisible partner that allows you to build your own brand. Regular RiskHedge readers know it now runs websites for over one million mom-and-pop shops.

There are 30 million small businesses in the US. These small businesses make up 99.9% of all companies in America. They are the beating heart of communities across the country. And according to IRS data, firms with less than $100,000 in annual sales raked in a combined $2.2 trillion last year.

Yet almost none of this happens online. A recent CNBC poll found almost half of small businesses don’t even have a website. And according to Gallup, two-thirds of mom-and-pop stores that sell online generate less than 10% of their sales on the internet.

But coronavirus lockdowns have sparked a once-in-a-lifetime shift. It forced tens of millions of businesses to close their doors for months. And the only way to keep cash coming in is to sell online.

In short, mom-and-pop shops moving online for the first time ever is the next great internet boom. And they’re choosing to sell through Shopify over Amazon. In 2012, it had just 42,000 merchants. Today, more than 1,000,000 businesses around the globe have set up an online store with Shopify.

This is the world’s most disruptive retailer that most investors aren’t paying attention to. It’s a stock to own for the next decade.

Here’s the Disruptor Amazon Can’t Compete With

Etsy (ETSY) is another member of the “anti-Amazon” alliance.

Etsy is an internet marketplace for artisans selling handcrafted, one-of-a-kind items. You’ll find everything from vintage jewelry… to solid wood picture frames… to custom wedding invitations on the website. It’s essentially a department store for craft goods.

In short, Etsy has become the “go-to” for artisans selling online. It currently has 65 million items you can’t find anywhere else. For example, my cousin recently bought my grandmother a family tree on Etsy. It was custom-made with all the grandkids’ names

And unlike buying stuff at big box stores, which is a chore, spending money on Etsy feels “good.” You can click on each item and read the story behind the person who made it. In short, it’s rewarding to know your dollars are going into the pockets of small businesses.

For example, my colleague just bought a $400 laundry rack on Etsy. He could have picked one up on Amazon for 50 bucks. When I asked why he bought one on Etsy he replied, “A woman in rural Maine handmade the rack. It feels good having it in my home.”

The Amazon machine simply can’t compete with this. In fact, becoming the “Amazon for artisans” is Etsy’s big opportunity. Roughly $5 billion worth of craft goods were sold through its marketplace last year. Yet the Association for Creative Industries shows folks in these markets spent $100 billion on handcrafted and unique products last year.

So Etsy has only realized 5% of its potential so far. It has years—even decades—of rapid growth left in the tank. As it helps millions of artisans sell their talents to the world, it’s sure to become an online titan. This is a stock that can double many times over in the coming years.

Amazon Won’t Dominate the Next 20 Years of E-Commerce

Amazon has been one of the most dominant, disruptive stocks over the past two decades. And it will continue to be a major force in online shopping. But its time as America’s undisrupted online king is drawing to a close.Disruptors like Walmart, Shopify, and Etsy are nipping at its heels. And I’m betting these three stocks will outperform Amazon over the coming years.

Stephen McBride

Stephen McBride

I’m a professional investor and the chief analyst at RiskHedge, a disruption research firm. My team and I hunt for under-the-radar “disruptive” companies that are changing the world and making investors rich in the process. Get my latest analysis at RiskHedge.com.

Source: Forbes

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