In his first letter to shareholders since taking the reins from Jeff Bezos in July, Amazon President and CEO Andy Jassy provided a history lesson with some Easter eggs of future vision.
While light on hard news, the Thursday (April 14) letter provided a glimpse into how Jassy’s influence continues to shape what became the world’s largest retailer in 2021, finally bypassing archrival Walmart.
Saying Amazon’s consumer business “realized the equivalent of three years’ forecasted growth in about 15 months,” he pointed to the logistics issues that Amazon’s legendary fulfillment network dealt with as demand rose, and how success makes its own challenges.
“We spent Amazon’s first 25 years building a very large fulfillment network, and then had to double it in the last 24 months to meet customer demand,” he wrote.
As Bezos passed the torch last summer, Amazon was busy beating out competitor Walmart as the world’s biggest retailer, garnering 3.6% of all consumer spend and 9.4% of all U.S. retail spend.
Details of that hotly competitive race are found in the new PYMNTS report, “Amazon Versus Walmart Q4 2021: The Ongoing Battle for Consumer Retail Spend.”
Get the study: Amazon Versus Walmart Q4 2021
Primed for the Future
Future benefits for Prime members are hinted at.
“Ironically, just before COVID started, we’d made the decision to invest billions of incremental dollars over several years to deliver an increasing number of Prime shipments in one day. This initiative was slowed by the challenges of the pandemic, but we’ve since resumed our focus here,” Jassy wrote in the letter.
Pointing to Prime viewing enhancements like on-screen data about actors and shows “or sports stats a click away in our unique X-Ray feature” Jassy couldn’t resist dropping a reminder that “you’ll hopefully see it in our upcoming ‘Lord of the Rings’ series launch (coming Labor Day 2022).”
Amazon’s reported $1 billion investment to produce new “Lord of the Rings” content is seen as a crowning achievement of Amazon Prime, representing ultimate tentpole programming and possibly doing HBO’s smash hit series “Game of Thrones” one better by tapping into Tolkien.
Another Prime Video coup mentioned is Thursday Night Football, “the NFL’s first weekly, prime time, streaming-only broadcast, airing exclusively on Prime Video starting in September 2022.”
Along the same lines, Jassy noted that Prime Video is proving as good for movie studios and networks as Fulfillment by Amazon (FBA) does for sellers, saying: “Companies like Warner Bros. Discovery, Paramount, Starz, Corus Entertainment and Globo have found that they’re driving substantial incremental membership and better customer experience through Channels.”
Bringing one-click shopping into the TV viewing flow is on the channel guide for the future.
PYMNTS’ Karen Webster wrote in March that “Embedding commerce inside of streaming platforms is one of the greatest untapped opportunities inherent in the digital transformation of the global economy.”
Read more: Will Amazon Make Streaming Shoppable?
‘Divinely Discontented’
The letter can be seen as a missive to basically all businesses that innovation drives growth, and keeping current with technology pays often unanticipated dividends, as it did for Amazon’s consumer side throughout the pandemic.
Jassy characterized it as a state of being “divinely discontented with customer experiences, whether they’re our own or not,” adding that “customers always want better, and our job is both to listen to their feedback and to imagine what else is possible and invent on their behalf.”
Amazon’s Alexa and Echo get honorable mention, but no news except: “We have several other devices at varying stages of evolution.”
See also: Alexa Will Soon Tell Consumers When Wish List Items Are on Sale
The Amazon chief also wrote of the company’s efforts in noncore areas.
Jassy wrote of allocating “$1.2 billion toward affordable housing initiatives in the areas around Washington state’s Puget Sound region, Arlington (Virginia), and Nashville (Tennessee)” from its $2 billion Housing Equity Fund that established in 2021.
Amazon’s goal of reaching 100% renewable energy by 2030 has been moved up five years to 2025, he wrote. The company has 100,000 electric delivery vans on order to help meet the revised target.
He also mentioned Amazon’s Kuiper satellite project to bring broadband internet to underserved regions. Amazon announced April 5 that it has “secured up to 83 launches from three commercial space companies — Arianespace, Blue Origin, and United Launch Alliance (ULA) — to provide heavy-lift capacity for the program.”
The Andy Jassy CEO Primer
Starting at Amazon in 1997 fresh out of Harvard Business School, Jassy was known as a close “shadow advisor” nearly from the start, and his influence spans Amazon Web Services (AWS) to warehousing ops.
For those interested in the Amazon CEO’s seven-point recipe for success, it’s spelled out in the letter. The abbreviated version is hire the right builders; organize builders into teams that are as separable and autonomous as possible; give teams the right tools and permission to move fast; have blind faith but no false hope; define a minimum loveable product (MLP) and be willing to iterate fast; adopt a long-term orientation; and brace yourself for failure.”
Read also: Amazon Adds 5% Merchant Surcharge Citing Fuel Costs and Inflation
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