In recent years, eBay and Amazon are competing with one another more and more. As consumers, we experience the two online marketplaces quite differently. EBay is the place to hunt for a deal in an auction format, while Amazon is the site of choice for a hassle-free transaction. When John Donahoe joined eBay in 2008 as CEO, the company was struggling. EBay had stagnated. However, they have since engineered a major turnaround. EBay has reinvented itself away from the auction-based personal marketplace that made them famous. Instead, eBay is flourishing with a newfound emphasis on mobile retail and payments (PayPal).
One specific aspect of eBay’s strategy caught my eye. Unlike Amazon, who competes directly with traditional retailers, eBay is partnering with physical retailers, using their mobile platforms to help bring brands online. Traditional retailers are looking at eBay as a partner and at Amazon as a threat. This strategy fits with eBay’s history, as eBay has always been more about enabling individual sellers and facilitating transactions than developing eBay as an independent retailer.
With all their dominance and success, it is hard to doubt Amazon’s strategy. However, with <10% of worldwide consumer spending occurring online, there remains an enormous amount of value in aiding physical retail brands, rather than attacking them.
This was inspired by a NYTimes Article.
Just watched the Charlie Rose interview with Jeff Bezos. Twas very interesting. Bezos is an extremely passionate guy, a trait I find fascinating after running Amazon for 18 years. The interview left me with several thoughts I wanted to share:
- Inventors, Not Disruptors: Bezos kept harping on how Amazon focuses on inventing, not necessarily disrupting. He views disruption as a byproduct, even a consequence of great invention.
- Customer Focus Above All Else: The other central component of Amazon’s identity is being customer focused. They are constantly asking themselves “What do the customers want?” “What will they love?” “What do customers need and how can we make getting it easier/cheaper/better?”
- The Internet is still in its infancy: Bezos believes that the societal reinvention brought on by the Internet is very young. he believes we are still in Day 1, as things are moving faster than ever. When it begins to slow, he says, we are in Day 2.
- Brick and Mortar is not in Amazon’s immediate plans: Again, Bezos is focused on invention. He is only interested in getting in brick and mortar if Amazon can bring something new to the table. He is not interested in a “me to” approach to retail. All about invention.
- He’s an optimist, and has a hearty laugh.
Watching the interview gives two clues as to why Amazon has persisted and flourished for so long. First, as Bezos states, there was an incredible demand for such a company. They filled a clear gap in the market. Bezos says that the hardest times for Amazon was the process of raising money to found it. Success was almost instantaneous.
The other clue is Bezos himself. He has an incredibly impressive eagle’s view of the Internet/Ecommerce/Technology industry, and approaches every decision through the lenses of customer focus, invention, and teamwork. Listening to Jeff makes the staying power of Amazon much less mysterious. He has incredible vision.
What a fascinating guy.