“American Idol” isn’t drawing near the viewership it used to. A new winner was named this month and how many people know who that was or care? A recent National Public Radio report said that reality shows are losing their novelty and their audience, and scripted television shows are making a comeback. So, will people tire of shopping remotely, online, and return to brick and mortar, high-touch stores? Does what goes around always come around?
Jeff Bezos, CEO of Amazon, would like to sell you everything online, and deliver it to you very quickly via unmanned drone. Instant gratification, 24/7. No more fighting traffic at the shopping mall or standing in line to check out purchases with a surly cashier. But I like real shopping. No more serendipitous finds at a cute boutique or fun girls’ getaway shopping trips or supporting a local retail start-up? The Everything Store: Jeff Bezos and the Age of Amazon, by Brad Stone, a reporter who has covered Amazon and the tech industry for 15 years, relates a history of this disruptive company and its contentious founder.
Out-of-the-box, disruptive thinking is a trademark of Jeff Bezos that placed him in a program for gifted students at a public school in Houston in the 1970s. After graduating from Princeton University, Bezos had a brief career on Wall Street before heading cross-country to Seattle. In the proverbial garage of his home, Bezos set out to create “the next Sears” online, a “lasting company that is a major force in retail.” He thought books would be an easy thing to sell online, so figured out, with the help of computer engineers willing to take the risk with him, how to get books from wholesalers to customers and take advantage, whenever possible, of free shipping and bulk orders. Bezos wanted Amazon to get big fast, and had always admired Walmart’s scale and influence. He lured away Walmart executives who could help create that scale, figure out logistics, and build warehouses — Bezos calls them Fulfillment Centers.
Despite the dot-com crash in 2000-2001, Amazon survived and was evolving beyond what Walmart methods could negotiate. Like Steve Jobs at Apple and other heads of large, growing tech companies, Bezos had to raid rivals for people with necessary skills and daring, to keep his company moving forward. It was a bumpy road as high stress, long hours, and the imperious decisions of Bezos caused many employees to exit. Branching out from selling books and music, some of Bezos’s exploratory ideas worked and some faltered and fell flat. Bezos tried to infiltrate the jewelry industry, even employing jewelry makers who could craft an engagement ring that the customer designed online. It flopped. People actually wanted to try on rings and keep that shopping experience high-touch. But selling web services to other, smaller companies turned out to be a lucrative endeavor even though it met with initial resistance from the proprietary Bezos.
Amazon continues to be disruptive in the publishing world with its cheap pricing of ebooks. There is an ongoing squabble between Amazon and major publisher Hachette Book Group. A statement from Hachette makes clear their desire “to survive and thrive as a strong and author-centric publishing company.” Customer-centric Amazon wants to keep prices low to keep customers coming back for more. Amazon is said to be developing its own smartphone (do we really need another?) and has launched six new television shows. A May 26 article in Forbes titled “Amazon’s Wholesale Slaughter” tells of Amazon’s invasion of the wholesale and distribution industry, using its wide reach of Fulfillment Centers. Yet the article suggests there are limits to what Amazon can do, questioning, for example, whether Bezos would ever enter such specialized fields as the distribution of hazardous chemicals. When it comes to retail, however, even the sky is not the limit, as Bezos revealed with his plans to introduce delivery by drones.
Whatever happens in the online retail world and, consequently, hands-on shopping, I learned much about the world of retail and tech companies in this book. Retail is cutthroat, and whatever you can do to beat your competition is fair game. Tech companies want to thrive and grow and reap rewards for shareholders if they’re publicly owned. Buy up your competitors or raid them for top talent, or outflank them at every chance. It’s high pressure, high stakes, keep evolving or die. Remind me to never become the head of a giant tech company, especially if it sells stuff. The stress would be disruptive.