But this was also a rare insight into Jeff Bezos’ approach to retail – one that has made a market leader in the US, the UK and beyond.
Here are three other things that struck us from Jeff Bezos’ latest annual letter to shareholders.
Customers, says Bezos, are “divinely discontent” with expectations that always go up. Although this has been the case since hunter-gatherer days, he says, it’s now happening faster than ever.
“It may be because customers have such easy access to more information than ever before – in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something’s in stock, find out how fast it will ship or be available for pick-up, and more. These examples are from retail, but I sense that the same customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.”
Staying ahead of those demands, he says, is about having high standards in the business, in order to meet customers’ high expectations.
“Building a culture of high standards is well worth the effort,” says Bezos. Not only does this enable the business to build better product and services for customers, but potential recruits are drawn to high standards in a business as well. Those standards, he says, are teachable, domain specific, adding “you must recognise them and you must explicitly coach realistic scope.” Amazon’s own high standards, he said, have helped it reach milestones that each “represent the fruition of many years of collective effort” from having more than 100m Prime members to the opening of the Amazon Go store in Seattle.
Over the years Amazon, says Bezos in the recent letter, has had “billions of dollars’ worth of failures”. That’s a theme previsaged in Amazon’s 1997 letter to shareholders, attached to this latest letter. Some 20 years ago, he said that the retailer would take an analytical approach to measuring effectiveness of its investments – and to “jettison those that do not provide acceptable returns” while investing more in those that do. He added: “We will continue to learn from both our successes and our failures.” Evidently the approach worked.
- Image courtesy of Amazon