Scott Galloway: Amazon's Achilles Heel

Key Takeaways

If you want to see denial come to life in the form of a person, ask a watch executive what his or her opinion is of the Apple Watch and the impact it might have on the industry. The Apple Watch will likely do 13.5 billion dollars in sales in year 1, making it the largest watch company in the world in its very first year. There isn't a watch company that won't be affected by the Apple Watch. So, a big winner, big box retailers who are fighting back with this incredibly overlooked asset, their stores, finding soft tissue in the Achilles heel of Amazon, who collected 3.1 billion in shipping fees last year, but had to pay out over 6 billion in transportation services. Big box retailers are using their brickandmortar as flexible warehouses and in some cases getting you your stuff faster than Amazon can. a loser. Online German retailers of personal care and beauty products who have not invested in innovation. And as a result, the German market only accounts for about half a billion in online beauty sales versus the UK where it's over a billion with a much smaller population. The culprit not investing in digital innovation. And as a result, Amazon has captured 26.5% of the online German market. Ignore Amazon at your own risk. A likely loser in 2015, French department stores who have not invested in innovation. As evidenced by our digital IQ index looking at French department stores and other department stores across Europe, French department stores Lavon Mar and Print are some of the most challenged and some of the most feeble digitally. The sugar high of Chinese tourists is ending and when it's over, we're going to be stuck with retailers who are not very strong digitally. Look for French department stores to suffer in 2015. New data out this week from the National Institute on Alcohol Abuse regarding how much alcohol Americans consume. They parsed the entire alcohol consumption population into deciles. And the bottom line is the lower half just don't drink. When you get into the sixth, seventh, and eile, it begins to look like normal drinkers who drink somewhere between two and three drinks a week. Where things get really scary is in the top decile where on average people drink 73 drinks a week. Yes, 10 drinks a day. Meaning that if you're at a Christmas party with a 100 people, one in 10 people there, if they skip drinking alcohol one day, need a case of beer the next day or four bottles of wine to catch up. We have an industry with some of the most glamorous brands in the world that is fueled by a cohort that has a serious problem. Just talking about the story makes me want to pee or leave my phone in a cab. We'll see you next week. [Music]