Amazon’s growth story hit an unexpected snag in Q3 of 2004. Its online retail store was still growing, but at a slower pace compared to Q3 of the previous year. As an example, the year-over-year growth of its largest product segment, US Media (books, music, video) went from 15% to 12% growth. Not a huge slowdown, but this was a company that had set its sights on becoming an ‘everything store’. By comparison, Best Buy posted an annual sales growth rate of 17% that year. Furthermore, the shift from offline to online commerce was accelerating. This meant that Amazon could lose its head start amidst online retail’s growth if the trend continued.
This is a companion discussion topic for the original entry at https://commoncog.com/case/amazon-prime/