The new Atlantic feature entitled “Cancel Prime” makes clear the cost of Prime, which added 30 million new users during the pandemic as people came to rely on Amazon to deliver goods when stores were closed or seemed risky to shop in. It’s on track to pass Netflix as the most-subscribed-to service. By scrutinizing the way Amazon’s flywheel – a powerful moat that has been emulated by other retailers – works, the report underscores just how much Amazon has altered our brains as consumers.
Prime is the financial engine keeping Amazon’s fulfillment-and-delivery machine running, and also the argument for its existence. If consumers don’t expect packages in 24 hours, there’s no reason to require workers to scan a new one every 11 seconds until their discs bulge. But those expectations—and their costs—are bigger than Prime, or even Amazon, because Amazon is so big that every sector of our economy has bent to respond to the new way of consuming that it invented.
It’s good to remind ourselves just how much Amazon dominates the current retail landscape. Prime Day’s force is enough that other retailers bent over to promote their own deals in hopes that people in the shopping mindset will find something they need there, instead of or in addition to Amazon. Companies like Shopify and Etsy position themselves as the anti-Amazon. And while Amazon’s armor can be dinged by dozens of worthwhile competitors, to be competitors they still have to play into the same customer patterns that Amazon created. Speed, convenience, efficiency are all expectations that tax our supply chains and workers. The Atlantic’s Ellen Cushing likens Amazon to climate change in that recognizing its damage on the individual level isn’t enough to lead to reform, and it’s not clear what would be.
This is a good piece but it is a starkly skeptical and narrow one. It’s a view shared by many analysts who don’t frequently engage those who view warehousing and last-mile work as real opportunity. The piece fails to highlight the middle-class sized hole that the eCommerce industry will fill as other decent wage-paying roles evaporate under the pressures of a bifurcating economy. Amazon has its faults and, if you have read my take on Lina Khan’s view of the company, I share many of Cushing’s concerns:
Amazon built its business around the belief that as long as consumer prices were low, antitrust laws wouldn’t apply. Lina Khan went on to say: “Due to a change in legal thinking and practice in the 1970s and 1980s, antitrust law now assesses competition largely with an eye to the short-term interests of consumers, not producers or the health of the market as a whole; antitrust doctrine views low consumer prices, alone, to be evidence of sound competition.”
The health of the retail sector has been on decline for quite some time. Retail business owners, real estate brokers, lenders, and commercial developers didn’t foresee how much of an effect Amazon and eCommerce would have on their adjacent sectors. Where there was originally confusion and apathy, there is now a shared disdain for the Seattle eCommerce giant.
I am also aware that without many of the roles that Walmart, Amazon, Costco, and other mega-retailers have provided over the last decade, our fragile economy would have been less likely to absorb the blow of a pandemic-induced recession. There is good and bad with everything in market economies. Amazon needs reformed, but so does our collective understanding of what’s at stake.
Web Smith on Twitter: “Thought more on $AMZN’s anti-trust concerns. Here’s a (short) history of U.S. monopolies being broken:1. Standard Oil owned oil. 2. U.S. Steel owned steel.3. American Tobacco owned it. 4. AT&T owned communications.Amazon owns just 4% of retail. And 43% of eCommerce. / Twitter”
Thought more on $AMZN’s anti-trust concerns. Here’s a (short) history of U.S. monopolies being broken:1. Standard Oil owned oil. 2. U.S. Steel owned steel.3. American Tobacco owned it. 4. AT&T owned communications.Amazon owns just 4% of retail. And 43% of eCommerce.
Our retail economy is evolving at a pace it has never seen. Without the roles that Cushing decries, millions more would be out of work. Digital commerce and its physical components are at the dawn of its role in domestic and international trade. We will rely on eCommerce infrastructure to support a resurgent middle class (even if the industry is archaic in its current form). It’s about time that we stop holding onto the notion that retail today will ever return to the proportions of retail before. It’s going to be different; it will be more distributed and much of it will be digital-first.
By Web Smith (with Hilary Milnes)
[…] The question, then, is what is the responsibility of the ecommerce merchant? There’s a new level of expectation from ecommerce shoppers. And now that we’ve all had a taste of this frictionless, fast-paced shopping experience, it’s unlikely that we’ll ever go back. […]
[…] The question, then, is what is the responsibility of the ecommerce merchant? There’s a new level of expectation from ecommerce shoppers. And now that we’ve all had a taste of this frictionless, fast-paced shopping experience, it’s unlikely that we’ll ever go back. […]
[…] The question, then, is what is the responsibility of the ecommerce merchant? There’s a new level of expectation from ecommerce shoppers. And now that we’ve all had a taste of this frictionless, fast-paced shopping experience, it’s unlikely that we’ll ever go back. […]