Amazon: A Company without Limitations
Published in Les Echos
(France) on 28 July 2011
by Philippe Escande (link to original)
(France) on 28 July 2011
by Philippe Escande (link to original)
Translated from
by Marisa Burnside.
Edited by Jenette Axelrod.
Old America may well be crippled with debt, paralyzed by political infighting and stifled by soaring unemployment, yet she maintains her vigor. The world's number one power is not only the realm of unbridled finance, it is still the world's leading place when it comes to inventing the future.
If the future of communication is known as Google or Facebook, that of trade is called Amazon. Not the future of e-commerce which the company already widely dominates, but the future of retail trade. When Jeff Bezos, who opened his site in 1995, boasts of being able to surpass Wal-Mart one day, the largest business in the world with two million employees and sales of 400 billion, he's not to be doubted.
Moreover, nor do stock market investors, who had the nerve to welcome the announcement of a decrease in an already low profitability at Amazon, with a dramatic increase in share prices. Once again, Jeff Bezos had them in his pocket, disclosing an increase of over 50 percent in sales. Since the flotation of the company on the stock market in 1997, he made them stomach the fact that his company would run at a loss for many years (six in total), in order to create a bullet-proof future. And they will say, afterward, that markets only like the short-term!
Bullet-proof, that entails gigantic warehouses storing over 2 million square meters worth of all of the goods on earth. Future trade will inevitably switch toward online sales. Why? Because, since the days of the first merchants, the recipe for success has remained the same: the provision of the greatest choice at the lowest possible price. And that is just what Amazon can offer, thanks to a reduction in fixed costs and the continued optimization in processing and in funds enabling e-commerce.
And if, in addition, the service is readily available, why continue to go to these large shopping centers, the commercial cathedrals from the 1980s, of which Wal-Mart is the absolute emblem?
Of course, tomorrow's trade will not be entirely online. Branded boutique stores for feel-good shopping and local businesses, indeed even markets, for the purchase of fresh produce, will still exist on our street corners. However, large retailing of a general nature will be hard pushed to make it and will have to reinvent its business model.
How long will it take before Jeff Bezos' prediction comes true? At the current pace, 10 years, maybe fewer. Meanwhile, Amazon will have probably consolidated its progress, expanding to yet more territories. America could by all means slip up, fall victim to her delusions of grandeur, but others would take her place. The commercial revolution has only just begun.
If the future of communication is known as Google or Facebook, that of trade is called Amazon. Not the future of e-commerce which the company already widely dominates, but the future of retail trade. When Jeff Bezos, who opened his site in 1995, boasts of being able to surpass Wal-Mart one day, the largest business in the world with two million employees and sales of 400 billion, he's not to be doubted.
Moreover, nor do stock market investors, who had the nerve to welcome the announcement of a decrease in an already low profitability at Amazon, with a dramatic increase in share prices. Once again, Jeff Bezos had them in his pocket, disclosing an increase of over 50 percent in sales. Since the flotation of the company on the stock market in 1997, he made them stomach the fact that his company would run at a loss for many years (six in total), in order to create a bullet-proof future. And they will say, afterward, that markets only like the short-term!
Bullet-proof, that entails gigantic warehouses storing over 2 million square meters worth of all of the goods on earth. Future trade will inevitably switch toward online sales. Why? Because, since the days of the first merchants, the recipe for success has remained the same: the provision of the greatest choice at the lowest possible price. And that is just what Amazon can offer, thanks to a reduction in fixed costs and the continued optimization in processing and in funds enabling e-commerce.
And if, in addition, the service is readily available, why continue to go to these large shopping centers, the commercial cathedrals from the 1980s, of which Wal-Mart is the absolute emblem?
Of course, tomorrow's trade will not be entirely online. Branded boutique stores for feel-good shopping and local businesses, indeed even markets, for the purchase of fresh produce, will still exist on our street corners. However, large retailing of a general nature will be hard pushed to make it and will have to reinvent its business model.
How long will it take before Jeff Bezos' prediction comes true? At the current pace, 10 years, maybe fewer. Meanwhile, Amazon will have probably consolidated its progress, expanding to yet more territories. America could by all means slip up, fall victim to her delusions of grandeur, but others would take her place. The commercial revolution has only just begun.