By Jim Lewis, CEO Enhanced Retail Solutions LLC
If you think for one minute Jeff Bezos is stepping away from Amazon you haven’t been paying attention. Most CEO- Founders of his tenure often move upwardly sideways- meaning they are still going to be involved in any major strategic decision, but happy to let someone else take the everyday heat. Plus, as someone who has proven to be a highly competitive individual, I bet he does not want Elon and other peers in his league to outpace him in the fun billionaire type projects- like space exploration.
Amazon will be just fine. They will continue to grow exponentially, disrupt new businesses and change retail. Amazon saved many of us during the pandemic. A lot of pundits suggest that when most of the population is vaccinated, consumers will return to brick-and-mortar stores. I am not so sure. Yes, there will be a certain percentage of the population that just wants to get out and about again, but I think restaurants and entertainment venues will reap the benefits of that over retailers. Amazon and those that implemented better online platforms have proven their model offers more flexibility and convenience. With more same day or 2-day delivery, why leave the couch? I think we will soon see if experiential shopping really is the next big thing.
When I think of the huge impact Amazon has had on other retailers, I cannot help but think about all the retailers that went under during the pandemic. Amazon sped up the rate at which a retailer must innovate to stay relevant. For those stores circling the drain over the past few years, the pandemic just sped up the process even more. Success or failure is ultimately based on the decisions they made along the way. Remember, Amazon started as a bookstore. They have had very few missteps (remember the Fire phone?) but overall, they entered the tablet market, AI voice assistants, data hosting, content creation, delivery and oh yeah- they sell everything available on the planet. Very well diversified. It is a combination of smart decision making, timing and good luck. A retailer needs all 3 to survive.
Look at JC Penney. I am a proud alum and enjoyed many years of growth there. There are many reasons for their current situation. What company was riper to benefit from online sales? They had the distribution systems, stores for customers to pickup and return and a well-run catalog business that was doing photography and item attributing long before the web existed. They pretty much invented drop-shopping. But in the early aughts, the decision was made to all but eliminate catalog, sell distribution centers and streamline the business. On paper it probably looked smart at the time. But I would argue that one decision did more damage than Ron Johnson. Who knows- maybe JCP could have been the main competitor to Amazon rather than Walmart? Flush with cash, they could acquired other retailers or expanded into other businesses and diversified.
My point is that today attitudes and shopping habits change quicker than ever and maybe the laser focused approach does not work for retailers of the future. When the next pandemic hits and the world shuts down would it not be great if they had other businesses to help them leverage? Is diversification the key for retailing in the 21st century?
Hats off to you Mr. Bezos and thank you. We need more people like you who do not take electric cars or reaching Mars as a pipe dream- but who can make it happen. Those first steps are the most important- setting a direction, capitalizing and making bold decisions. Not everyone has the stomach to wake up each day and know they could go from billionaire to completely broke in the same day. That mentality offers true progress that the rest of humanity can benefit from.