Amazon is indeed an existential threat to Wayfair. However, while Amazon is an incredible company, it might become a victim of the future as much as it is the w

Amazon is indeed an existential threat to Wayfair. However, while Amazon is an incredible company, it might become a victim of the future as much as it is the winner of the present. Self-driving trucks, advanced robotics, and automated, turnkey warehouses will trivialize supply chain superiority. In that version of the world, shared warehouses (enabled by automation) will be even more cost-effective than Amazon's proprietary warehouses. Logistics will be disintermediated, and the value of Amazon.com will be reduced to that of its front-end interface and first-party products. We don't just visit Amazon because it's a one-stop shop. Humans aren't that lazy. We visit it for the whole package: - fast shipping - reliable pricing - Prime lock-in (I paid $100 for this, I better use it) - habit - and variety. Habit and variety are redundant. We have the habit of visiting Amazon because of the first three factors that I mentioned. The variety is present because the first three factors attract/retain customers, who in turn have the habit of shopping on Amazon, who in turn attract third party vendors. Amazon can get away with a lot (rising prices, first-party substitution, sub-optimal interface) because of logistical barriers to entry and the current necessity for a vertically integrated intermediary. When those factors disappear, Prime will be commoditized. Warehouses and delivery networks will be commoditized. Amazon's moat in third-party online shopping will diminish. Amazon must continue to grow away from its core platform business. Whole Foods was a smart acquisition, Amazon Go is the future of low/mid-end retail, and AWS is a profitable act of genius (high margin, uncorrelated with the rest of the business). That will not change the fact that specialty websites will become more serious competitors in the future. In 10-15 years, there will be plenty of room for focused retail sites like Wayfair.com. The question is: can they survive until then? Probably, but it will be a rough ride.