As Jeff Bezos stepped down this month as CEO of Amazon in many ways his ubiquitous brand has reshaped the retail landscape forever, customer expectations have been raised beyond all recognition and become the standard by which the sector as a whole now is judged.
It is easy to be distracted by the monopolistic sales figures that Amazon now enjoys with over 50% of all online sales in the US being transacted through their platform and over 125million Amazon Prime members in that country alone. The UK is not far behind with one in three online sales being handled by Amazon. This truly global business, which now delivers over 10 billion items per annum and employs 840,000 staff, has been built on simple principles; always putting the customer first, innovation and being patient.
From starting as a standalone online book retailer Amazon has achieved its goal of becoming a mass market retailer that offers an unrivalled range by category backed with highly competitive pricing and unmatched customer service and efficient delivery. In addition, as a brand Amazon has successfully managed to extend into data services, entertainment production, audio devices and most recently ventures on the traditional high street retail with the purchase of Whole Foods and now opening its own fully branded stores.
At the very core of its commercial proposition Amazon has been a combination of burning ambition and relentless consumer focus. Its ability to enter new markets with both efficiency and precision and to take a long-term view with both the public equity markets and investors – it took 14 years for it to book a net profit – place it now in an unassailable dominant market position.
For traditional high street brands Amazon was undoubtedly underestimated in the first instance at its inception in 1994, when the internet was in its infancy, and has increasingly grown into a very difficult competitor to cope with and left many traditional retail brands struggling or buried in its wake. Brands also quickly realised it was virtually impossible not to list their products on Amazon and maintain market share and, either as wholesale customers or adopting their hugely successful Fulfilment by Amazon model, migrated en mass to their platform – further undermining the bricks and mortar retail business model.
For those retailers willing to adapt to the market presence of Amazon they’ve been a key motivating factor in upping their multichannel offering and customer service. It has been encouraging to see in recent weeks several UK retail brands including Dixons, Dunelm and JD Sports delivering excellent financial results for 2020 despite the epoch changing challenges presented by COVID, and the continued growth of UK pureplay retailers including Boohoo and ASOS who are experiencing exceptional growth and profitability. No doubt all retailers now measure their own service levels and execution against that of the ever-evolving Amazon.
As Jeff Bezos takes up his Chairmanship and focusses on the myriad of his other interests including space travel and publishing, both customers and the retail sector alike are respectful for the pioneering, exacting and constantly disrupting spirit of Amazon that has created a standard that all retailers now need to aspire to in order to succeed.
As the exiting CEO described in his letter to Amazon shareholders in 2019: “We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.”
The unrelenting process of growth for Amazon will undoubtedly continue after the founding CEO now steps upstairs…