Terence Channon
Published in

Terence Channon

Another Take on Amazon

I recently came across an article on LinkedIn, “Amazon is Going to Kill Your Brand. And Your Job” by J.R. Little. The content was as incisive as terrifying as the headline suggests. The world is changing and Jeff Bezos and Amazon are certainly leading the pack of becoming the Jean-Baptiste Emmanuel Zorg and Zorg Industries, respectively, of the real world. I hope that inspired a chuckle from fans of the 1997 sci-fi movie, The Fifth Element. I wouldn’t be surprised if Mr. Bezos took some direction inspiration from the movie’s key villain and adhering to Zorg’s mantra: “If you want something done, do it yourself. Yep!”

Nearly all points in J.R.’s article are difficult to disagree with. It focuses on the impact Amazon is having on retailers and nearly every consumer goods category that comes to the top of your mind. Physical retail jobs are absolutely disappearing. It talks about how Amazon wants to better facilitate all aspects of people’s lives. Alexa is a perfect example of this — speaking a command and granting your wish akin to a genie in a lamp. Personally, I think Alexa listens a little too closely to me and I prefer to keep it unplugged, but I would be lying if I said I am not enchanted by the thought of speaking “open garage” on my way into my driveway versus reaching up and pressing a button. The article touches on Amazon’s passion for the consumer experience with a key focus being saving time. I also cannot disagree — by using Amazon, I can buy a TV in a matter of minutes and feel very confident about the price, features and quality. Compare this to a trip to the nearest electronics retailer, I would need at least 45 minutes to drive there and back and spend time in the store.

I then started reading the comments and those as well as discussions I had with friends today are what prompted these thoughts. Nearly every comment on the article vehemently agreed with J.R. — hail to Amazon — taking over the world — putting everyone out of business and out of a job. The conversations with my friends were the same — Amazon is an unstoppable behemoth that is going to corner the market in nearly every industry. It is difficult to dispute the opinions of so many as well as the dire statistics and stock performances of retailers. Even Blue Apron’s stock took a hit on the Amazon/Whole Foods acquisition with Blue Apron owners terrified simply by the ideas that fresh food delivery providers would be quashed by the Bezos train.

Then, my World War Z instincts perked up and I immediately thought of the “10th Man” principle.

“After several disasters that NO ONE thought could happen, the Council decided that if a vote was unanimous against a possible outcome, one member would act as if it was ABSOLUTELY going to happen, and trying to prevent it. This way, if they have a crisis, one man is prepared for it, and assumes directorship of the council for the duration of the crisis.”

A few anecdotes plus some recent research came to mind. $150 per barrel oil, everyone said it would only go up. Real estate prices would never go down. The Titanic will never sink. The Giants will never beat the Patriots. I can’t quantify “everyone said,” for these examples, but it sure felt like the whole world, the media, Vegas betting lines, customers, banks, the stock market and other stakeholders were all in a frenzy thinking the impossible could never happen. I am not suggesting Amazon is going to hit an iceberg and sink, but is it possible that maybe they broke off a little more than they can chew?

J.R. talks about the immense time saving that Amazon offers to consumers and that is one of the key drivers of their value proposition. Yet, Amazon bought Whole Foods — a move that scared the heebee jeebees out of Blue Apron and every traditional grocery retailer. Do you know what does not save time? Blue Apron. Sure, you save a trip to the grocery store, but have you ever prepared one of those meals? I have — on 3 occasions. Each took me over an hour to prepare and make. It was fun — it was interesting. It surely did not save time. Today, for instance, I spent about 5 minutes prepping baked chicken (I’ll boast — it’s masterful thanks to my Grandmother; hit me up for an invite to dinner if you want to try) before slapping it in the oven for 40 minutes while I watched TV and did some work (rather than craft my home cooked meal). Is Amazon, which has been so dependent on saving consumers’ time going to get into a business that clearly is not a time saver? I am not sure and clearly there is a battalion of very intelligent and successful professionals at Amazon making sure that $13.7 billion-dollar deal pays off. However, the notion of Amazon potentially engaging in a business that does not save time — and therefore going against its key value-proposition — raised my eyebrows.

Enough anecdotes? Ok, done. I recently came across some research that suggests that the majority of consumers prefer shopping in stores. And yes, this absolutely includes those pesky millennials. It also suggests that this is not a trend or desire that is likely to change in the future. Amazon’s success has been dependent on the trend that people just prefer to shop online. It does not take a rocket science to figure out why this is the case. Going into a retail store these days is very stressful. Either you cannot find someone to help you or someone wants to be overly helpful. The stores even lay things out so you must engage with a salesperson, even if you do not want to. Some retailers even ask who it is that helped you, even if nobody did, delaying the check-out time. What used to be just accepted as retail behavior then became annoying and now has become outright stressful. Same with calling a customer service center. People still like to call — they just do not like the huge phone trees or the voice-prompts that never quite seem to understand what you are saying.

Can someone put a hurting on Amazon the same way they have put a hurting on retailers? It may be too late to stem that trend. However, if a retailer were to come up with a fantastic, ultra-customer friendly store concept that focused exclusively on the consumers’ needs, then Amazon may start singing a different tune. Right now, however, everyone seems to be at their mercy — retailers, hosting companies (thanks, AWS), brands, call centers, logistics companies and more. Is it possible Amazon could get too aggressive with a path that could cause them to stumble? Of course — it happens to nearly all, if not EVERY, company that has ever existed.

I do not own Amazon stock. I wish I did. I wish I leveraged myself to the hilt after I graduated college and bought EVERY SINGLE SHARE possible. Every dollar invested would have become $100. Would I be as inclined to do the same now? Well, honestly, maybe. Amazon does have their act together and is the clear leader in this digital transformation space. The only thing holding me back is, yep, you guessed it, I feel that the entire world is just eating out of Amazon’s hands and evangelizes how this one company is going to result in a commercial and capitalist dictatorship that has their hands in all aspects of our lives and “kill every other business in time.” (per my friend).

Me? Well, I still enjoy going to the grocery store and the mall — I like to try things on, see the picture on the TV I am looking at or more easily see a broader array of products. Argue me on that last point all you want — for me, it’s far easier for me to see all of the Pop Tart flavors available on the shelf at Publix instead of a digital catalog. I have not bought anything from Amazon except books. Well, that’s not true —once I bought a pack of vuvuzelas around the 2010 World Cup from Amazon.

Everything else besides most of my books and vuvuzelas, I prefer to buy elsewhere and if the masses are right and Amazon is going to be the end of any other shopping or consumerist mechanism available, I suppose I will wish I bought shares of Amazon today. But, maybe — just maybe — the 10th man concept will apply and retailers will come up with an approach to be relevant, again. I’ll give it some thought.

Good night.



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Terence Channon

Helping small business owners, founders, start-up employees, and investors understand entrepreneurship issues & investing in alternative & undeserved venues.