Established retailers, and their shareholders, are getting trampled as Inc. (AMZN) strides into more and more categories of merchandise. However, products and services with five key attributes are largely beyond Amazon's competence or desire to deliver successfully, at least for now. This is the finding of Morgan Stanley (MS), in an August 2 report entitled "Which Industries Could Be Safe From Amazon?" The five attributes are: customization and uniqueness; high regulation; high shipping and stocking costs; high post-sale service; and transactional complexity.

Additionally, Morgan Stanley identifies 20 "protected sectors" that have one or more of these attributes, shielding them from incursions by in the near future. These sectors are: travel, formal apparel, intimates, luxury goods, groceries, pharmaceuticals, healthcare, finance and insurance, energy and utilities, telecom, commercial airlines, autos, DIY auto parts, off-price apparel, dollar stores, arts and crafts, home furnishings, specialty industrial products, home improvement, and real estate.

Customization and Uniqueness

Morgan Stanley argues that commodity products are more at risk from disruption by than unique or customized products or services, such as bespoke clothing, custom fabricated parts, exclusive or limited items, and luxury goods. The protected sectors offering these attributes include travel, formal apparel, luxury goods, intimates and groceries.

On the other hand, is in the midst of entering the grocery business, with its bid for Whole Foods Market Inc. (WFM). While online travel booking has large established competitors, there also are many smaller players, and there is no obvious barrier to entry by Additionally, high-end clothing and luxury goods already are available through online sales channels. itself has a "handmade" category featuring artisanal products.

High Regulation

The more regulation surrounds the delivery of a product, the more difficult it is to enter that market, Morgan Stanley says. The hurdles can be very complicated and costly to observe, with a variety of rules imposed at the local, state and federal levels. Protected sectors include finance and insurance, pharmaceuticals, healthcare, energy and utilities, telecom, commercial airlines and autos.

Meanwhile, already sells a wide variety of over-the-counter healthcare products, and it may be considering the purchase of a drugstore chain or a mail order pharmacy. (For more, see also: Amazon Could Buy Walgreens, Rite Aid, Express Scripts.)

High Shipping and Stocking Costs

Products with high shipping costs relative to value have limited online sales potential, and are especially unattractive if they also generate low margins. Items with high warehousing costs relative to sales margins also are unattractive, such as items that are ordered infrequently, have low inventory turnover, or have large bulk or weight relative to profit margin. Also problematic are products or product lines with many small variations. Protected sectors, according to Morgan Stanley, include groceries, DIY auto parts, off-price apparel, dollar stores, arts and crafts, home furnishings, home improvement supplies, and specialty industrial products such as HVAC and electrical.

Nonetheless, has chosen, for strategic reasons, to become a one-stop-shopping destination, and offers free shipping on orders that meet a minimum value, thereby encouraging larger orders. It already sells automotive parts and accessories, arts and crafts supplies, and has made a well-publicized deal to offer Kenmore brand home appliances. Also, a more generous return policy leads some DIY auto enthusiasts to favor it versus brick-and-mortar auto supply stores, per anecdotal evidence gathered by this writer. (For more, see also: Home Depot, Lowe's Seen Oversold on Amazon Attack.)

High Post-Sale Service

Products that require high levels of post-sale customer service, such as installation, are beyond's current capabilities, Morgan Stanley notes, as are relationship-based sales, such as B2B sales. This has been a barrier to its becoming a serious competitor in the large home appliance market, for example. Goods and services with a large experiential component are another problem area. For example, travelers need a sounding board for troubles, Morgan Stanley observes. The protected industries in this area include travel, DIY auto parts, healthcare, home improvement and specialty industrial products.

Morgan Stanley says that's inability to provide installation service is a barrier to its success in the DIY auto parts market, but DIY means that the buyer will be the installer. Going forward, moreover, the company can forge alliances with established providers of installation and other post-sales services, to surmount this barrier.

Transactional Complexity

Customized sales processes, such as real estate transactions and large, complex industrial contracts, do not fit's business model. Neither do the complex scripting, payment and reimbursement mechanisms in the pharmaceutical industry, Morgan Stanley adds. Protected sectors include autos, pharmaceuticals, healthcare, real estate and specialty industrial products (such as HVAC and electrical).

However, as noted above, buying an established dispenser of prescription drugs would be a quick way to navigate the complexities in that sector. Online auto sales already are a reality, with a few leading competitors profiled by Popular Mechanics. Carvana, for example, delivers most orders the next day, offers a seven-day test drive, and even has futuristic vending machines for buyers who prefer to pick up. Moreover, a recent survey commissioned by Automotive News found that 80% of those surveyed believe that at least part of a purchase transaction could be conducted online.

Don't Count Out Amazon

While may suffer competitive disadvantages in select markets, this has not prevented them from making forays into these sectors, as noted above. Moreover, is a flexible competitor, with multiple business models. For example, regarding products with low order frequency and low inventory turnover, the company often provides just order fulfillment and shipping services, charging the ultimate vendor for warehousing. In other cases, offers its website as an order-gathering mechanism on a commission basis, leaving fulfillment to the vendor.

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