This week: How the almighty Amazon changed retail forever, and why a reckoning is in the cards.
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In the quaint olde days of yore, when Bezos had nothing but a dream and a head full of hair, the first question every investor asked him was: “What’s the Internet?”
With the announcement of his role switch from CEO to executive chairman, the question everyone’s asking now is: “What’s Blue Origin?”
• Could this move have something to do with increased scrutiny from regulators worldwide? “Like other Big Tech companies, Amazon is confronting tough questions about whether the company cheats to stay on top, takes more from the world than it gives and is seeding a generation of subpar jobs,” noted The New York Times. In the UK, their tax bill looks like it’s coming due, with retailers and landlords alike pressuring the government to reform online sales tax to be on par with physical business rates. That multi-billion-pound windfall? It can staunch the bleeding on the high street.
• Not a good look: when Amazon cancelled the extra $2 hourly hazard pay during a pandemic. This, from a company who saw revenue hit $100bn last quarter. An even worse look: aggressive union-busting, a stance which has investors worried. If the Alabama facility successfully unionises, the ripple effects will be felt far beyond Amazon. “It’s really about how workers are going to be treated in the future,” said Stuart Appelbaum, president of the U.S. Retail, Wholesale and Department Store Union.
• The death of retail has so often been laid at Amazon’s feet, that it might come as a surprise that it’s bureaucracy that’s been the most significant driver of NYC’s vacant retail square footage over the past decade. Countless small businesses also rely on the platform, and make up nearly half of all annual Amazon sales. It’s an unlikely brand incubator, but that’s exactly how some investors are treating it, injecting homegrown sellers with the capital to go global.
And so, twenty-six years after the founding of Amazon, look at the Internet now. Dominated by the FAANG gang. Omnipotent algorithms track and monetise our every move.
With online pretty much the purview of a handful of companies, is offline the last frontier that’s truly open to all?
LEARNING FROM AMAZON
As much as you might morally be at odds with feeding the beast that Bezos built – don’t lie, you got that Prime.
In a long read published by The Guardian, Mark O’Connell notes that while “there are many criticisms to be made about Amazon’s corporate practices… you can’t say that it is not efficient, nor that its efficiency is not in your interest as a consumer.” So what retailing lessons can be gleaned from such monumental success?
• According to Forbes, Jeff’s legacy is a “culture of innovation” and a “test, fail and learn mindset.” As a company that pioneered the customer review, they’ve also permanently raised the bar on customer satisfaction. What used to be (creepily) called “customer ecstasy” is now labeled “customer obsession.” “That’s how we earn our success… [we’re] obsessed with delighting our customers,” said one former exec. If you want to get TED-talky about it, it’s all about the three pillars of Customer, Convenience, and Community.
• Let’s face it. At logistics? They’re better than you. For smaller operators without the tech resources, Amazon’s newly launched B2B services might be game changers – particularly for IT-challenged fashion brands. “[It] may never be a credible destination for luxury fashion, but it could be a platform that solves fashion’s many back-end inefficiencies,” reported The Business of Fashion.
• Sometimes, being the anti-Amazon is reason enough to build a following. Bookshop.org was the first to gain international traction, and lockdown has seen the emergence of online directories for independent businesses. Ali Haberstroh launched Not Amazon to help struggling Canadian indies, and sales for some have surged 500%. A new U.S. platform, Nearby, wants to be the Amazon for local businesses. Some other fav ethical marketplaces to watch: Jamii, The Helm, and Bombinate.
Perhaps the most universal of The Everything Store’s teachings? In an overcrowded space, curation is key.
For what’s possibly the ultimate statement in having a point of view: Morioka Shoten, a one-room store in Ginza with a single title on display. In just a few years, they’ve built an international cult following. One book at a time.
Words by Amy Tai, creative consultant and native New Yorker now based in London.