Is the monster on the move …..?

It is very difficult to write about anything to do with Retail without constantly mentioning Amazon. I cannot think of any other phenomena in modern retailing history that has such an impact worldwide.

In my last last post I mentioned that an approach by Amazon had been rebuffed by Waitrose in the U.K. This weeks rumours suggest they maybe looking at Asos and Ocado. They have the resource and they have the motivation .

Whilst most of us are quick to condemn there are some positives attributable to its existence. For starters they have created thousands of wealthy independent entrepreneurs by dint of the marketplace . I can think of no other retailer (with the exception of the likes of eBay and quite possibly Alibaba) that has been a wealth creator for third parties.

It has shaken up the traditional mega retailers, in a way that none of them expected. They have put the consumer at the forefront of their model, offering convenience, breadth of range, access to much product that was only available to a few, highly competitive pricing and above all extraordinary levels of service . All of which has led to a level of consumer confidence that I believe is unprecedented with any other retailer. The opening of a world market to small traders who would not been able to previously, penetrate.

That’s the upside. Amongst its many vices(? What is a vice to one is a virtue to another) have been the enormous turmoil created within retail markets. The likelihood that it has created a net loss of jobs (almost certainly within the retail sector) . The enormous pressure it has put on margins. The enabling of dodgy dealings ( the ease of selling counterfeit product, or less poor quality product). Despite Amazon’s attempts at reducing ‘dodgy dealings’ it is not difficult such product on a daily basis.

As to the future , there will always(well for some time anyway) be an ‘Amazon ‘ or it’s like. We have to live with it and adapt. The difference is that as it was the small retailer being hit hardest it is now the biggies who are most concerned.

Ocado recent success in the USA with it its tie up with Kroger (the world’s third largest retailer) only makes an approach by Amazon more likely. It has the war chest, it has the motivation, and the wherewithal. It may not be Ocado, but I am quite certain their next acquisition will make the major retailers wonder that they have got to do next to defend their status quo , let alone grow and develop.

It is a strange beast that attracts our consumerist psyche yet strikes fear into our commercial psyche. I suppose we can look back at previous monsters …..dragons, King Kong, Frankenstein, orcs et al…..we tend to get the better of them eventually. Meanwhile it is on the move and there will be more casualties before someone in shining armour comes riding in cuts its head off and saves us all, or more likely just creates an alternative.

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