Nothing causal.
I will say however that since the NYT piece on AMZN working conditions a couple years ago there has been a dearth of media scrutiny of the behemoth (sales) that Bezos built.
Most of the recent coverage has been either fawning or focused on pseudo-macro effects that may or may not prove to be real, so this is kind of refreshing.
From FT Alphaville:
Is Amazonification real?
There is a popular thesis, as recounted in this Forbes article last year, that e-commerce, robotics and AI are crushing consumer retail prices leading to an overall disinflationary environment. This in turn is changing the relationship between labour market slack and wages or inflation permanently.
The phenomenon can be summed up as the “Amazonification” of the economy.
But is this really what’s happening?
In a report last week entitled Did Amazon Kill the Phillips Curve?, BCA Research challenged this assumption.
Leaning on findings from US consultancy Bain & Company from December 2016, the ever-counterintuitive independent research shop noted e-commerce sales have been slowing.
The slowdown in e-commerce hints at two dynamics usually overlooked by the market:...MUCH MORE
On that last point, BCA argues it’s all about the cost trade-offs that come with e-retailing, especially once a certain scale is achieved (our emphasis):
- Not everyone wants to buy everything online. Many consumers still want to see and feel products in person before they make a purchase, especially when it’s a first-time purchase (new clothes, new accessories, new furniture).
- E-retailer cost savings versus traditional bricks and mortar stores aren’t necessarily that great.
Bain claims that many e-commerce businesses struggle to make a profit. The information technology, distribution centers, shipping, and returns processing required by e-commerce companies can cost as much as running physical stores in some cases. E-tailers often cannot ship directly from manufacturers to consumers; they need large and expensive fulfillment centers and a very generous returns policy.There may as a consequence be major advantages to running physical stores — as reflected in near secular highs for retail margins (outside of department stores). Who knew?
Moreover, online and offline sales models are becoming blurred. Retailers with physical stores are growing their e-commerce operations, while previously pure e-commerce plays are adding stores or negotiating space in other retailers’ stores. Even Amazon now has storefronts. The shift toward an “multichannel” selling model underscores that there are benefits to traditional brick-and-mortar stores that will ensure that they will not completely disappear.
On a historical scale, BCA adds, the Amazon disruption is minimal compared to the “big box” stores such as Walmart....
A trivial critique of the analysis:
In a previous post - the headline escapes me - one of her commenters raised the point that Amazon's very profitable Amazon Web Services is cross-subsidizing the other ventures.
Predatory pricing is a basis for possible market-power complaint and should be explored, even though a ruling against the perp is probably a long shot.
