Amazon CEO Andy Jassy released his annual letter to shareholders. You can read the letter in its entirety here. Below are my comments.
Overall, Jassy is focusing on all the right things for Amazon. Jassy had to reduce headcount at the corporate level, and allow for natural attrition to occur where possible to reduce the number of warehouse workers. A leaner Amazon should translate into a faster and more aggressive Amazon.
Jassy is getting Amazon associates back into the office. This is another must-have. Remote working destroys innovation and corporate culture at a company like Amazon. Note to Jassy: Fire everyone who resists returning to the office.
Amazon is investing in AI and Machine Learning. This is a must-have. I remain convinced that Amazon is going to find a way to incorporate Alexa into its AI platform to usher in conversational AI.
AWS is still facing challenges due to the global economy but AWS has plenty of room to grow. I agree.
Amazon will continue to grow their advertising business. This is a massive opportunity.
Amazon Business is generating $35B in revenue. 96 of the 100 Fortune 100 companies are customers of Amazon Business. I believe Amazon should target those same 96 companies for their 3PL services.
Grocery. According to Jassy, “Whole Foods is on an encouraging path, but to have a larger impact on physical grocery, we must find a mass grocery format that we believe is worth expanding broadly.” See comments for my opinion.
Below are the areas I believe Amazon should invest in:
Costco on Wheels – The warehouse club model, Costco Wholesale and Sam’s Club, is ripe for disruption. Amazon doesn’t need to build their own warehouse clubs, they can deliver pallet quantities to homes.
Banking and Finance. Amazon should release a Prime Credit Card for Prime members. Amazon should introduce a no-fee credit card replacement for retailers. Amazon should introduce AI-based ‘Personal Financial Planning’ that will allow Prime members best-in-class financial planning. Again, Alexa can play a role in this.
Amazon is acquiring iRobot. Why? To morph the technology into a personal robot for use in the home. Amazon must invest in robotics. Acquiring Agility Robotics is worth assessing.
3PL Services. It will take time but the potential for Amazon to become a major 3PL is there.
Parcel. Amazon should become a direct competitor to FedEx and UPS. Ship with Amazon will become a reality.
Amazon Wholesale. Amazon doesn’t only have to focus on stores in the grocery business. Amazon has the potential to become the largest grocery wholesaler in the U.S. Leveraging their Mothership warehouses, Amazon can reimagine the wholesale industry.
Aviation. This offers all kinds of possibilities. Amazon can acquire Southwest Airlines.
Amazon is a virtual company. It can virtually accomplish any goal they set.
