Amazon's Jeff Bezos: Customer-Obsessed and Ready for the Next Wave of Retailing

Jeff Bezos, the iconic leader of Amazon.com (AMZN), doesn't like to use military jargon when he talks about shoppers, and bristles at phrases like "targeting the consumer."

That should come as little surprise, given that the corporate culture of the e-commerce pioneer he founded has always been a little different from those of traditional retailers.

As the keynote speaker at a summit held this week by ShopSmart, Consumer Reports' shopping magazine, the head of the nation's biggest online merchant spoke with an uncensored wit and a candor unusual from a CEO -- no rah-rah company boosterism -- about his idiosyncratic business philosophies, management strategies, Amazon's growth opportunities, and how digital technology -- including mobile or "thumb" shopping -- is reshaping retailing.

Here are some highlights:

The Future of Online Retailing


"The most interesting trends in online retailing that speak to how we will be shopping is more and more, over time, people will be buying from tablet computers and mobile devices," Bezos says. Compare that to just 15 years ago, when most households had a single desktop computer, "and they didn't keep it on."

"It's unbelievable the transformation," Bezos says. "We're seeing this huge expansion in the wireless world, it's very exciting for us."

As smartphone processors get faster and the devices become more commonly used as shopping tools, "that's a big area that we'll be [innovating around]," he says.

But Bezos is still scratching his head as to how Amazon can tap into the sales potential of social networks. "There seem to be opportunities there, but it's not obvious what those are," he says. About 15 years ago, the retailer tested a feature where shoppers could see what their friends bought. But the idea was ahead of its time and didn't fly, he says.

Growth Initiatives

MyHabit.com, the members-only fashion web site Amazon launched this month, has the potential to change how people buy clothes online, Bezos says.

The spin-off is Amazon's answer to upscale "flash sale" websites like Gilt Groupe and Rue La La, which offer big discounts, usually for 36 hours to 48 hours, on upscale, designer merchandise in limited quantities.

But unlike those and other e-commerce sites that display still images of the clothes, MyHabit.com uses 360-degree video footage of the model wearing an outfit. The model does a full-turn on the page, "which is incredibly useful" to see how any piece of apparel -- be it a dress, blouse or pair of pants -- "hangs, drapes and moves on the figure," Bezos says. "You can't get that from a still photo."

(The videos also include the model's height and measurements and the size she's wearing.) Amazon's approach could usher in a new wave of sophistication in e-commerce and dictate what the next generation of retailers' sites could come to look like, Bezos says. The concept is "good for the consumer and good for the retailer," as it will reduce clothing returns, he says.

Amazon will also grow by expanding existing product categories, as it already sells pretty much everything, Bezos says. "Our goal is to have every single product that you might want to buy available for fast delivery."

The Biggest Misconception About Amazon


"A lot of our customers still don't know that we sell more than books," which illuminated for Bezos "just how busy they are," he says. "We're not that important to people."

And speaking of the category that put Amazon on the map, the Kindle e-book reader, which has been criticized for not being built to download books from the library, will be equipped to do just that before the end of the year, he says.

Customer Service vs. Competition

Amazon's main driving principles are "customer obsession," long-term thinking, a willingness to invent, but also "a willingness to fail and be misunderstood," Bezos says.

Amazon knows it business decisions will be unpopular from time to time, and that's just fine, he says. "Every time you do something new -- like the electronic book, when we tried to drive down the price point [of a book] -- and some people didn't like that," there's the potential to be misunderstood, "and you have to be okay with that," he says. The company also conducts "hundreds" of experiments daily, and many of them fail, but that's par for the course, he says.

When asked what competitors he worries about, Bezos replied that Amazon decided early on that it would be "competitor alert, but not competitor obsessed," Instead, his company is customer obsessed. "Companies can choose which they want to be. I think both models can be successful.

"The best customer service means the customer doesn't need to call you," Bezos says, noting the most common complaint from Amazon shoppers is, "Where's my stuff?" To that end, Amazon measures success in customer-contacts-per-units sold. "We endeavor to drive that down every year, and the way we're driving that down is by delivering [people's] stuff."

That fixation on customer service appears to have paid off, Bezos says: The company has some of the highest customer service ratings in the retail industry.


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Trind

I used to be an avid QVC shopper, but they've become a stuffy company, quality has lessened and they have phony vibes. I'm Amazon all the way. I like the free delivery, no sales tax, wide selection of....just about everything. The customer service is excellent. Delivery times are generally speedy. Returns are easy. If msde is shipped defective, Amazon will resend by overnight delivery and credit your account before they have the defective msde back in their possession. Also, I appreciate the reviews, ability to rate the sellers, and the discussion forums. I like being able to watch movies and television programs on Amazon. I really like that Amazon is not a "stuffed shirt" company. That's a big factor in choosing where to spend my money. With the exception of groceries, I detest shopping in stores.

May 14 2011 at 7:27 AM Report abuse rate up rate down Reply
WIAPilots

I always joke that Amazon is my "drug of choice!" I buy EVERYTHING from them! I can't recall the last time that I actually went shopping in a "real" store. I really like Amazon for many reasons:
1. I get free 2 day shipping with Prime. Or 1 day shipping for $3.99 (Unfortunately, they probably lose money with me.)
2. Amazon has competitive prices.
3. NO Sales Tax! Tucson has almost a 10% sales tax so this can add up!
4. They now have super easy returns when an item is damaged or isn't as described. You just print out a return slip and UPS comes and picks it up the next day. You don't have to have a label or anything.
5. I really rely on the reviews. There are so many times that I haven't purchased an item because the reviews were terrible. But so many times that I have purchased an item because the reviews were great.
6. Amazon makes it SOOOO easy to send gifts. Truly. I'm someone who loves to send gifts and they even gift wrap for you. Plus they keep an address book with all your past addresses.
7. My mom is elderly and I love to surprise her with various items so I just have them sent to her even though we live in the same town. Plus Amazon has so many items that cater to elderly individuals that really make their life easier.
The ONLY thing not great about Amazon is that it takes practically an Act of Congress for them to get rid of fake reviews or when other reviewers start harassing you for your opinion. Customers really shouldn't have to deal with that.

Amazon is one of the best inventions ever!!!

May 14 2011 at 4:07 AM Report abuse rate up rate down Reply
mdennish

I have purchased many items[ 20+] from Amazon and i have been very satisfied with their merchandise and pricing.I have had to return only one item and it was very easy/ I am happy with Amazon.

May 13 2011 at 7:34 PM Report abuse rate up rate down Reply
tenfanla

Bozo looks like a retarded clown in that pic. Amazon's a big scam. If your small business's product sells well, they kick you off Amazon and sell the same product themselves. They have been perpetuating this scam for years and leaving the small business owner in the dust. That's how Amazon is able to grow. Just ask all the business owners who got jacked.

May 13 2011 at 10:43 AM Report abuse +1 rate up rate down Reply
Franco

Los, I see that all is okay and a happy face greets me at the front page, but back to reality kids, it's the ecomy stupids.

May 13 2011 at 2:30 AM Report abuse rate up rate down Reply
1 reply to Franco's comment
Franco

Sorry for my mispelling, *lols.

May 13 2011 at 2:32 AM Report abuse rate up rate down Reply
netexas121

wow no one is really interested in Bozo's oops Bezo's career at Amazon...that has a crappy e-reader.

May 12 2011 at 9:25 PM Report abuse rate up rate down Reply
1 reply to netexas121's comment
Franco

Don't knock it, I got a best seller on Amazon.

May 13 2011 at 2:39 AM Report abuse rate up rate down Reply
JP

Test.

May 12 2011 at 5:27 PM Report abuse rate up rate down Reply
1 reply to JP's comment
Franco

ing, one two tee.

May 13 2011 at 2:38 AM Report abuse rate up rate down Reply