Is Amazon the Retail Industry’s Viet Minh?
I know what many of you are probably thinking already. Those of you that do not know me, are probably going, “Huh?” And, those of you that know me well are probably saying to yourselves, “Has he gone off his rocker?” or “I know it is his first blog post, but what in holy hell does that title mean? Call his friends and family. It may be time for a sit-down intervention.”
If you, the reader (hi mom), will indulge me, I promise everything will make sense soon. When I started this blog, my aims were two fold: 1) I wanted to talk about what I know — retail, and specifically omnichannel retail, while even sprinkling in a little bit of my experience as a father and a husband (note: I said husband and not husbandry. I don’t know word one (literary pun) about the care, cultivation, and breeding of crops and animals). 2) I wanted to have a little fun while doing it.
So I figured, for my first blog attempt, what would be better than to go back to a place and a time that is generally regarded as the best, most fun years of one’s life — college. The title of this post was inspired by a college history course I took senior year for my major. I don’t remember the name of the course, but it was something like “Assumption Testing within Historical Analysis.” There is likely no way that was the real title of course, but I figured the more highfalutin I could make it sound for a Stanford course, the more you would respect me.
I don’t remember much about the course either, except for it being taught by Professor Stephen Haber. Professor Haber was hilarious and brilliant, probably in that order. Each week he would assign us a different historical text to read, and our job was to dissect the quality of the logic chain upon which the thesis of the text was based (excited to keep reading yet?). One week, for example, I vividly recall discussing Growth Against Development: The Economic Impact of Railroads in Porfirian Mexico by John Henry Coatsworth. I don’t know how he did it, but Professor Haber made discussing, for the nine or so of us ready to graduate seniors, the economic and social good of railroad development within early 20th century Mexico incredibly interesting. I remember him writing the entire logic chain of Coatsworth’s argument on the blackboard, and, to us impressionable 22-year old’s, absolutely shredding it to pieces.
Later in the semester, our attentions turned to a different work . . . wait for it . . . Hell in a Very Small Place: The Siege of Dien Bien Phu by Bernard Fall. It was Professor Haber’s favorite historical work. For those of you that are not current on your 1950’s Vietnam history, Dien Bien Phu was the battle that terminated French involvement in Indochina. According to Wikipedia and to reviews on Amazon (the irony of which will not be lost in a moment), Dien Bien Phu was the “climactic confrontation” of the First Indochina War between France and communist revolutionaries in Vietnam. French General Henri Navarre assumed command in Vietnam in 1953 and devised a plan to lure Viet Minh forces into Dien Bien Phu, where he believed French air superiority would ensure a victory. After 57 days of fighting, Dien Bien Phu fell on May 7, 1954. Neither Navarre nor the overconfident French leadership was prepared for the “guerrilla” lengths the communist forces were willing to go for victory — digging tunnels through mountains, crawling through jungles, calling for volunteers upon volunteers as reinforcements, etc.
Published in 1966 (!), Fall’s thesis was simple. Professor Haber loved it. It was structurally sound. The United States, or anyone else for that matter, had no chance of winning a war in Vietnam. Unless the U.S. was willing to learn the lessons the French learned — i.e. “not to underestimate the guerrilla or overestimate U.S. air power, and above all to secure the support of domestic public opinion” — the U.S. didn’t stand a chance. Essentially, in Fall’s mind, a battle 20 years before the evacuation of Saigon in 1975 was the writing on the wall.
The same thing is happening in retail today. The last 20 years of e-commerce, namely Amazon, are metaphorically the same as Dien Bien Phu. Go back in time. Who took Amazon seriously? Amazon was growing their e-commerce business while providing the e-commerce platform and cloud hosting services for other retailers. Amazon was building a better mousetrap, while overconfidence and hubris got the better of the retail industry. Retailers believed and continue to believe that physical stores are the equivalent of air superiority in Dien Bien Phu. Physical stores are valuable, but in no way are they, in their current form and operation, enough. Just ask Scott Galloway, Professor at the NYU Stern School of Business. As Galloway is fond of saying, stand in the center of almost every retailer today, close your eyes, spin around, pretend you are back in 1985, open your eyes, and ask yourself what has changed? Sadly, not much for almost all retailers. The retail experience from 1985 is nearly the same as it is today in 2017, and the playbook most retailers are running is still Student Body Left as well.
Just as the Viet Minh did in Dien Bien Phu, and this point is often glossed over, Amazon accomplished all of it successes while quietly securing public favor too. Amazon built a company that was customer first. Everything Amazon has done and continues to do — from the reinvestment of their profits to their focus on “guest love” vs. “cost problems” — puts the customer at the center of everything, and so we at home, on their website, speaking to Alexa, are continually immersed in a frictionless experience that we cannot live without. Amazon wants to buy Whole Foods? Oh, yes, please! My life will be so much better! If Walmart were to do it, we would all be crying foul.
And, if I still haven’t convinced you yet of my analogy, let me leave you with one final example. The other day I needed batteries. So I decided to conduct a little test. I went to a major retailer. I parked my car, took my 4-year old and 2-year old out of their car seats, found a pack of AA’s, and then proceeded to wait in line to pay. I waited in line 12 minutes. 12 minutes. 12 minutes just to pay, not even accounting for the 10 minute commute time back and forth to my house, the time to find batteries in the store, plus the lovely torn anterior cruciate ligament I suffer nearly every time I take my kids in and out of their car seats.
I then pulled up my Amazon app. 5 seconds to find the batteries I wanted. 10 minutes for Amazon to pick and pack them for shipment to my house next day. Just 10 minutes.
Translation: Amazon can pick and pack product faster than I can checkout in a store.
The tunnels have been dug, the artillery has been dragged into position through hell and back, and the ground forces (cough . . . Alexa) continue to swell.
At least, the coal industry is on the up and up. We got that going for us.
Oh, and let’s not forget robots too.
Be careful out there,
P.S. If you enjoyed the above, please share the post with your friends and colleagues. I would love to hear your feedback as well. Please also stay tuned for additional content in the future.
Coming soon, riveting posts entitled . . .
- Are Retail CEOs Destined to Become Murray Hamilton?
- 10 Signs from an Earnings Call that a Retailer is in Trouble
- Retail’s Product Problem — Why We Need to Stop Thinking with our Small p’s
- Reverse Engineering and 10,000 Leagues Under the Omnichannel Sea
- Moore’s Law and a Discussion of the Log-Linear Relationship Between Device Complexity and Retail
. . . let me know what you would like to read first.
P.P.S. Who the heck is Murray Hamilton?
Originally published at omnitalk.blog on June 20, 2017.