Robin Lewis of The Robin Report writes, that billions of dollars, years, and time were wasted for another failed brick-and-mortar experiment for Amazon. He continues:
Here’s a glimpse of a strategic disaster. I gave Amazon CEO, Andy Jassy, kudos as he took the top job as, in my opinion, Amazon was slipping into maturity. I said the meteoric ecommerce frontrunner needed a level-headed business professional to turn the growth strategy from the “get big fast” culture created by its brilliant founder to a more sustainable and profitable forward arc before it might tip into the abyss. One of the big failings of entrepreneurs like Bezos is that they don’t know when to let go of their breakthrough innovations. Simply, at some point on the way to scale, the newborn baby gets too big for the parent genius to manage. So, I believe Bezos did the right thing by ceding the helm to Jassy, who was enormously successful in growing Amazon’s AWS (Amazon Web Services) into a juggernaut, accounting for some 60-plus percent of Amazon’s profitability. But what does he know about retail?
“Why wouldn’t Amazon just want to acquire its way into the physical retail world instead of building it from scratch? With a market cap of close to a trillion dollars, it could have acquired both Kroger and Kohl’s to leapfrog over the build challenge. Overnight, they would gain a national fleet of thousands of stores (including their management expertise) as opposed to the investment of billions of dollars and years to build out, which we are witnessing as a failed strategy.”
Test, Test, Test: Billions of Dollars and Years of Wasted Time
So, Jassy was none too late but obviously had a huge challenge to bring a more stable pace to Amazon’s growth strategy as well as (always) making more money. And looming large in front of him had to be the fire-hosing of capital and time pushed into the testing of one brick-and-mortar retail model after another, and another, and another. Yes, they did acquire Whole Foods, which they still haven’t figured out what to do with. In my opinion, the buy was a huge mistake.
According to Amazon, they are sticking to their focus on grocery. “Physical retail remains an important part of our business, and we’re continuing to invest in growing our grocery stores business, which spans Amazon Fresh, Whole Foods Market, Amazon Go, and third-party partnerships,” states an Amazon spokesperson.
Well, we’ll see about that. Again, I think Jassy is the right guy, at the right time, and therefore, I can’t believe he necessarily believes that statement. I speculate that he more likely believes what I put forth in my article. It just isn’t a fit, but he owns it. Perhaps he’s giving his team more time to make it work. My bet is it isn’t going to happen. […]
But here’s a more audacious idea. With Amazon’s market value, why don’t they just cut to the chase and acquire the biggest and by many measures, arguably the best retailer in the world? Walmart watch out.
The jury is out on Amazon’s physical retail future, and I for one am watching from the sidelines with intense anticipation. If you follow my reports on the topic, you’ll see that I called this doomed experiment early on.
Andy Jassy is taking intelligent paths to cutting costs, (physical stores included), strategizing sensible and profitable growth, and weighing risk/reward equations for acceptable innovation concepts. All business as usual with a rationalized strategic plan. Amazon will prevail as the global e-commerce leader. Maybe that’s all it needs to be, and it can abandon its ambition of dominating every retail channel. My question: When is enough, enough?
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