retail news in context, analysis with attitude

Any reader of MNB would know that I could not resist this one...

Seeking Alpha had a story over the weekend entitled "How Dr. Strangelove Taught Us To Stop Worrying And Love Amazon," suggesting that, just as in that classic movie when General Buck Turgidson says that he wishes he had a version of the secret Soviet doomsday machine, retailers may at some point they had their own version of Amazon.

The argument is that while Amazon certainly has its flaws, both from a retailing and investment perspective, its potential far outweighs the potential pitfalls in its business model.

Here's the argument in a nutshell:

"To argue that revenue growth has slowed and the stock should be sold is a bow to the law of large numbers and ignores the profit potential created by Amazon's incessant investment. Bears, mistakenly in our view, want to treat the company as a mature enterprise rather than a dynamic risk-taker bent on growth and changing the way consumers consume.

"This is not to say there won't be failures. Everyone is aware of the Fire phone flameout and the diaper disaster. And bears predict the same for Amazon's new 'Dash' button, which allows customers to reorder items before they run out with a push of a button. We are a contrary sort, though, and our confidence in Amazon is shored up by its failures. To us, it only means the company isn't afraid of constantly pushing for growth."

You can read the entire analysis here.
KC's View:
This has been precisely the point that I've been arguing - that despite Amazon's missteps and the ways in which it seems to be profits-challenged, the company's persistent and consistent desire to innovate and push the envelope and challenge conventional ways of thinking only make it a company to be both respected and feared. And companies that think that Amazon won't have an impact on them are simply ignoring both history and reality.