First published 21st November 2018.
Black Friday is almost upon us and I thought I would take a moment to share the reasons why I tend to avoid shopping at Amazon.
Why am I writing this now? Well this is the first time in 7 years that I’m not working in retail with Black Friday trading targets burnished on my mind! As a result I have a little time to write about the topic.
Black Friday/Xmas is the biggest peak of the year for most retailers and it’s a lot of hard work. The work starts way earlier in the year and involves a lot of different teams. Your buying team — stock/range selection; merchandising — pricing/volumes; your content team — photography, descriptions, videos of every SKU; your marketing team — planning catalogues, emails, facebook ads, instagram ads, various ppc ads, seo content, affiliate campaigns; your website team — making sure your site can take the volume hit, is fast, responsive and user friendly; your warehouse team — making sure you can pick and pack orders on time; your couriers — making sure you have extra collections planned, fall back options and your customer service team — recruiting more people, training them up and being ready to deal with the massive spike in calls and emails that flood in each year.
Retail is about working as a team to co-ordinate all these things. Retailers must get a great product in front of a customer at a great price, deliver said product to the customer (be it in a shop or via online) and have some money left over. The money left over = their profit and means they’re still in business. If they have no money left over, the whole thing was potentially a waste of time (the exception being if said customer now ‘acquired’ comes back and shops again, thus making the future business profitable). But generally most retail businesses don’t have the luxury of trading unprofitably. The one huge exception to this is Amazon.
Amazon gets to behave in non-rational ways that other retailers simply don’t have the luxury of doing. If you speak to their category managers — the employees tasked with buying in stock for Amazon to sell and deciding what price to sell it — they primarily get appraised based on how much revenue they bring in, NOT on how profitable those sales were. Compare that to my experience of working at Mountain Warehouse and Emma Bridgewater and if any buyer had proudly reported at a weekly trade meeting that they had sold X waterproof jackets or dinner plates, but they’d taken a loss of Y £s. No matter how big X was, the Managing Director was highly likely to be hopping mad. But in Amazon’s world that’s okay, they are happy to take the loss as they are focused on winning market share.
This is Amazon’s philosophy writ large they are focused on winning market share — providing everything to everyone — “the everything store” and their investors support them in that. The Amazon share price keeps climbing, as investors believe this will be a profitable business in the future, so they can continue doing business, despite the fact they are not bound by the same rules of profitability that other retailers are. This means that at their quarterly investor calls, the markets don’t flinch, when for years they have reported little in the way of profits (note in recent years they have demonstrated some profits particularly from their software business) and that presumably at their internal trade meetings, buyers don’t quake at the thought of having to report on an unprofitable sku. In their world it is no big deal
And that’s the major reason why I don’t shop at Amazon, out of respect for all those retailers out there working hard, running profitable businesses, paying generally higher rates of tax (but that’s another story) and providing a great service to their customers. I don’t want to live in world where everything comes from the ‘everything store’ and is the same worldwide. I also think that alternatives such as the High Street in the UK are facing a tough enough structural challenge, (which quite frankly the UK government has done little to alleviate — again another story) without having one big overbearing player getting to play by it’s own rules. So I choose to support other retailers — both online and offline.
Despite all of this, I very much admire Amazon as a business — there’s a huge amount one can learn from them. I’m also not blind to the consumer boon they have provided in many ways — bringing down prices, improving service (at times) and driving innovation. But personally I will still choose not to shop at Amazon this Christmas. And I will be thinking of all my former colleagues, and the other c. 3m employees in UK retail.
So where perhaps you are wondering do I do my online shopping if I’m not using Amazon?!
Well I can highly recommend the following sites. For new books I tend to use Wordery.com and for second hand books WorldofBooks — both offer excellent free delivery options and good prices — often better than Amazon. As well as also being a pretty loyal Waterstones customer — they have great click and collect service and offer a great loyalty card with £10 off on £100 spend.
Beyond books — I just don’t start my search on an amazon page! It doesn’t take much imagination to start elsewhere — try your favourite search engine or your local highstreet.