Amazon’s move tanked the stocks of grocery competitors as investors worried that Amazon could do to grocery the same as it did to booksellers. Kroger Co. shares fell 14%, Target Corp. shares fell 12%, Supervalu Inc. shares fell 19%, Costco Wholesale Corp. shares fell 6.2% and Wal-Mart Stores Inc. shares dropped 5.8%.
[Jeff Bezos] doesn’t tolerate stupidity, even accidental stupidity.
Our heavy investments in Prime, AWS, Kindle, digital media, and customer experience in general strike some as too generous, shareholder indifferent, or even at odds with being a for-profit company. “Amazon, as far as I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers,” writes one outside observer.
But I don’t think so.
To me, trying to dole out improvements in a just-in-time fashion would be too clever by half. It would be risky in a world as fast-moving as the one we all live in.
More fundamentally, I think long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.
Of the most talked-about tech companies, Facebook by far received the least love. While Amazon, Apple and Google all ranked in the top five with total scores above eighty out of 100, and Microsoft ranked 15th with a “good” score above 75, Facebook came in 42nd – sandwiched between Best Buy and T-Mobile – with a score of just over 65, or what Fronk described as the borderline between “average” and “poor.”
“Facebook suffers badly from lack of trust,” Fronk said.
Amazon arguably collects as much personal data about its customers as Facebook does about its users, or at least if not as much, then possibly more intimate: purchase history, product search history, home address, credit card numbers.
‘Amazon is predominantly a virtual company where you don’t get to see the people. You don’t see brick and mortar,’ says Robert Fronk, executive vice-president of reputation management at Harris. ‘For them to first of all have the highest reputation, but more importantly to be the company with far and away the highest emotional appeal, is amazing.’ Harris defines emotional appeal as trust, admiration and respect, not whether you get weepy when your package arrives.
Bezos is the ultimate disrupter: He has upended the book industry and displaced electronics merchants. Now Amazon is pushing into everything from couture retailing and feature-film production to iPad-worthy tablet manufacturing. Amazon even sells ultracheap database software for businesses. (Oracle (ORCL), take note.) He’s willing to take risks and lose money, yet investors have embraced him, pushing Amazon’s stock up 30% so far this year. And even as Amazon expands and experiments, Bezos remains zealous about delivering a good customer experience. For all these reasons and more, Fortune has named Bezos its 2012 Businessperson of the Year.