retail news in context, analysis with attitude

The New York Times has a long piece this morning that suggests Amazon's dominance and size may be turning into a kind of vulnerability.

Here's how the Times frames the story:

"Amazon’s online store has surpassed Walmart, making it the largest retailer outside China. By delivering essentials and luxuries to those stuck at home during the pandemic, it helped many people navigate a bleak moment. Shipping times that used to be measured in days are now counted in hours. It is one of the few companies valued at more than a trillion dollars.

"For all that success, however, Amazon is under pressure from many directions."

People selling on Amazon's Marketplace increasingly describe it as having a "Wild West atmosphere" that hurts them.  There also are "regulators, who are taking a closer look at Amazon’s power; unhappy warehouse employees, who would like a better deal; and lawmakers, who want Amazon to disclose more about its third-party sellers. There are also the devious sellers themselves, whom Amazon says it is having a hard time eradicating.

"All of these critical groups could perhaps be dealt with. But there is one more that presents a much bigger risk: customers. As Jeff Bezos, Amazon’s founder, once noted, customers are 'divinely discontent.'  Last quarter they got fickle about Amazon. After years of meteoric growth, its e-commerce revenue barely budged.

"Maybe it was a blip. Or maybe shoppers are shutting their wallets in frustration … The bookstore is the oldest part of Amazon, still central to its identity but no longer to its bottom line. It feels like where every Amazon shopping experience could be heading — immense, full of ads and unvetted reviews, ruled by algorithms and third-party sellers whose identities can be elusive."

You can read the entire story here.

KC's View:

It seems to me that Amazon often tends to get defensive about stories like these, arguing that they are based on misperceptions and errant observations, more a result of the enlarged target on Amazon's back than an accurate portrayal of reality.

I get that.  It is hard to hear such things - even for one of the world's biggest and most influential companies.

But I would argue that Amazon really needs to create a kind of ombudsman position whose job is making sure that these criticisms are not just taken seriously, but dealt with transparently.  There is no shame in saying, "We tried to do our best.  We fell short.  We're going to do better."

The entire company is founded on the premise that established business models can be disrupted and made obsolete, but it seems to me that new CEO Andy Jassy needs to put less of a premium on disruption and more of a focus on living up to the value proposition that it has sold to both customers and vendors.  There will remain plenty of room for disruption in both new and existing businesses, but somebody has to recognize that there is a broader narrative playing out, a narrative that may be spinning out of Amazon's control.  And so, Amazon has a choice - write the next chapters itself, or let them be written by others.

I know which one I'd choose.