Did Amazon Prime Day signal a sea change in retail? Some called it a flop, some questioned if Amazon was crazy and they predicted a bad outcome. Amazon’s Jeff Bezos is crazy like a fox, and explains what seemed like farce at the time is turning into the stuff of PR legend. This week the quarterly reports hit the news and Wall Street – Amazon is now worth more than Walmart. Let that sink in.
Everything was up in their reports, and up went its stock – by more than 10% of the total value of the company. Amazon is now worth about $250 billion, and Walmart is at $230 billion. Amazon Prime Day was partly a celebration of their 20 years in business, but it was also the tossing down of a gauntlet. Amazon saying: “We are even bigger than Black Friday.”
Jeff Bezos has guided the company with his long-term vision since the beginning. Sometimes Amazon didn’t make a profit, but Bezos continued with his expansion plans. Growing the company every year and in the process, adding more and more items to the sales roster. To get this all in perspective, Amazon Prime members pay $99 per year for membership. In return a huge number of the items Amazon sells are shipped to members using 2-day shipping at the cost of $0 to the customer. All of that free shipping costs Amazon more than $4 billion annually – that’s more than 5% of Amazon’s total sales. Customers love that, but many of its shareholders have pushed Bezos to change that deal because of costs. Bezos continues his long-term endgame, keeping customers returning often knowing the long-term return is worth the short term sacrifice.
Ten or fifteen years ago when Amazon was a fledgling operation, consumers were still spending more of their money in traditional brick and mortar stores. Many people were very distrustful about giving their information to online shopping sites. But over those years, the tides have shifted and people are doing more of the shopping online.
Amazon has prepared for this. Bezos has honed his efforts with the belief this would be the outcome and it is paying off big time. They have already watched brick and mortar bookstores like Borders close their doors because of an inability to compete with Amazon. But Amazon stopped being just a bookstore some time ago. Walmart may now be in their crosshairs. Walmart is falling behind in their online efforts, and without some big changes, they may not recover.
Bezos is now worth about $43 billion as an individual. Moving him up the chain to become the 7th richest person on the planet. Don’t ever underestimate the value of a good sale – even if it seemed to be as much spoof as sale when it happened. Time and time again Bezos has proven his ability to bring the public to his table and that’s the secret to his and Amazon’s success.