It’s easier to run when the wind is at your back. Remember that the next time you’re out running and the next time you think about making an investment decision. One of the reasons Amazon is able to show strength at a time many of their competitors are struggling is that they have a number of drivers that cause a metaphorical wind to be at the company’s back. Need an illustration…here we go.
A big news story lately has been some insane idea that your gender identity should enable you to choose what restroom to use when out at a store or what locker room to change in, if I’m attending a school or part of a gym. I feel very confident saying that most people, especially those with kids, even more so with female kids, are pretty freaked out by this concept.
Just as a $15 minimum wage will push away lower skilled jobs that have an automated alternative, the thought of having some pervert in a bathroom your kid is using while at the store will push parents to opt for online shopping and home delivery. Most people do not get pleasure putting themselves through awkward and dangerous situations. If an alternative exists, they will choose the path that provides more comfort, even if a slight premium exists.
Amazon’s wide range of products and fast ordering speak directly to a society that is increasingly fragmented and polarized. They also are configured to serve higher wealth individuals. This group is not only in a better position to spend money on goods, but also generally has been predisposed to not want to submerge themselves with ‘the commoners’ at your regular retail establishments. The thought of pervert Bill frequenting the women’s restroom will push more people into the world of anti-brick and mortar shopping.
In the example above, I didn’t talk about the economy’s strength or buying trends, I talked about a political and social change that is pushing people to online shopping because they do not feel at ease with the direction our leaders are taking us. Amazon is the king of online retail and finds itself in a sweet spot.
A weak economy is not good for any retail establishment. In the short term, economic weakness has and may continue to take a backseat for an establishment like Amazon because other factors of change are playing to its benefit. The example provided is an external force that happens to be a benefit to Amazon and other online retail establishments. It’s only one factor and the truth is Amazon’s planning and strategy has led it to be able to take advantage of such a situation.
Never forget that social patterns do drive business success. Whether it’s where you are in your life (demographics), changes in society’s perceptions, or even geographic population shifts, all of these weigh heavily on economic dynamics and the ability for businesses to grow. Momentum is real.