I’ve seen enough. Amazon.Com CEO Andy Jassy’s gotta go.
Jassy became CEO 18 months ago, after spending most of two decades at the Amazon Web Services (AWS) unit.
Jassy was fine at AWS. He’s out of his depth now.
The problem is he has no vision. He’s a numbers guy. He runs the company for Wall Street, which is precisely the wrong way to run it. It needs to be run for the customer.
The problem with Amazon’s store is familiar to anyone with a working knowledge of business history. The store, which is by far the biggest part of the business, is fighting with itself. It’s a battle between Amazon’s own procurement and its third party sellers. Jassy blindly follows the sellers because they’re bringing in most of the sales.
But they’re taking the store down. The user experience sucks. The third parties are gaming Amazon’s algorithm, against one another, against the customer, against the store itself.
It reminds me of the 1923 battle between Coke bottlers and those who made Coca-Cola syrup. They were at one another’s throats over the price of sugar, which drove their profits. Coke hired its banker’s son, a salesman named Robert Woodruff. He told them to forget all that and focus on one thing, making sure every Coca-Cola tasted like every other Coca-Cola, no matter where someone bought it. In other words, think only about the customer and their experience with your product.
Amazon needs to do that. Its operating cash flow last quarter came up 25% short of what it was a year earlier. Product sales fell. Profits were miniscule. The store is failing, and in retail, a bad quarter can turn into complete disaster very quickly. Ask Bed Bath & Beyond.
Simply put, Amazon is getting killed by Walmart. Yes, Walmart. Walmart makes sure it has the lowest prices, it stocks close to customers, and it now does same-day delivery better than Amazon. That must change.
The answer, as it was for Coke, is to focus on the customer. Amazon should tell its third party merchants what it will stock, and what it won’t. It can then use its buying power to get the best possible prices on mass market goods, leaving third parties to fill in the rest of the line. If they know where Amazon won’t be they can focus on customers’ unmet needs, and everyone will do better.
What Amazon buys needs to be as close to the customer as possible. Amazon needs to get out of any business where it can’t fulfill customer wishes in this way. Then it can open up the APIs for things like wish lists and Alexa orders to the third parties, who will focus on what people might like, not what they likely need.
Goods sourced by Amazon and those sourced by third parties need to be clearly labeled as such online. All sites must be redesigned so these distinctions are clear. Everything must be examined from the customer’s side of the screen. The customer is always right.
Making this happen takes three people. A merchandiser, a fulfillment expert, and a salesman to keep everyone on-side. Amazon has become faceless and gray under Jassy, because he’s more interested in technology and numbers than anything else.
That’s where he should be. If he can’t see that then Jeff Bezos needs to come back to Seattle, kick Jassy’s ass out of there, and make this happen.
