Was there life before Amazon?

This year Amazon will turn 25. Even for those of us well outside of the Millennials bracket, it’s difficult to remember a time when the global giant wasn’t around to pander to our every need in super-fast time.

Not your average book seller

So, what really is the secret behind the success of Amazon and its founder Jeff Bezos (now the world’s richest man)? Taking a whistle-stop tour through the history of the company and the decisions it has taken, it’s fairly safe to say the success has mostly been down to excellent decision making and a deep and true understanding of what people want.

Amazon started out as an on-line book retailer in 1994 and, even after a very impressive first 5 years of trading and early diversification successes, Jeff Bezos famously remarked in 1999 that;

“There’s no guarantee that Amazon.com can be a successful company. What we’re trying to do is very complicated,”

This may have been somewhat humble of Mr. Bezos, who most probably knew that his business was already well embedded in our lives (in US culture at least) and was on a trajectory to mega success.

Stocks and market shares

From a very early stage, Amazon realised that the world did not need just another company coming to sell the same items which were already available elsewhere. In fact they concentrated on the limitations of the competitors which, in the case of books, was the lack of space to stock a wide and diverse range. Enter the first of the mega warehouse spaces where even the most niche titles could be made available to those who had in the past been let down by the high street book sellers and their ‘storage averse’ expensive square footage.

Change prediction

The demise of the traditional shopping environment was one which was identified early by Mr. Bezos and co. much earlier than others who now simply form a long list of advisors trying to ‘fix’ the changing landscape we all recognise in our own hometowns and cities. Amazon predicted the fade in popularity of the shopping mall which had long-since been the leisure choice of many a US citizen and ‘hang-out’ for socialising teens. Ironic in some sense, as the fast growth and dominance of this on-line retailer is now often identified as the sole cause of the high street retail sector. Whilst it is true to say that the convenience of Amazon does little to ‘stop the rot’, it appears that the move away from physically visiting retail spaces was already underway prior to its arrival on the scene.

Focussing on what matters

At RDZ we often speak of the modification in needs of current and future generations; a shift change from material possessions to more experience-based choices. Now, this may at first glance to go against the very idea of Amazon (in that the platform offers us a gazillion material purchase options) but, in truth, Jeff Bezos was one of the very first leaders to express his belief that a business needed to focus on entertainment and convenience to survive. This belief recognised that leisure would play a much more important role than it had done in the past and that the desire to spend more time on self, family and friends demanded that mundane tasks (i.e. buying stuff we need) would have to be done much faster. Very early in the Amazon journey came the understanding that the click would be King, for everything from pet food to luxury, high-value items.

The smooth which comes with the rough

Whilst this on-line goliath has experienced majorly negative criticism for some of its practices, there are a number of actions for which Mr. Bezos and his associates must be applauded. In our opinion, the areas where Amazon have illustrated their strength of character are:

• Their ‘Heads Down’ focus on the customer – never forgetting that their customer base is in fact their business
• Their recognition of the need to predict and consider the longer term – even when facing short term challenges
• Spending and investing for the future strategy – cutting prices, offering free delivery and developing technology and in doing so, foregoing annual profit for 10 years

A case study for success

Love them or loathe them, Amazon have provided many an aspiring business with a living and breathing case study, a tutorial in believing and achieving. The numbers might be bigger – after all the chances of having a trillion dollar business with 575,000 employees might be more than some could ever wish for – but there is much in the way of focus and strategy which one has to look upon with true admiration. We will watch with much interest as the next Amazon chapter begins with the launch of its aerospace division, Blue Origin, into space – a literal launch indeed!