January 14, 2013, 4:11 PM

Bezos: ‘I never expected this’

Amazon founder and CEO Jeff Bezos says he’s surprised by Amazon’s success.

Lead Photo

Jeff Bezos, founder and CEO of Amazon.com Inc., the largest retailer by web sales, received a Gold Medal Retailer of the Year award Monday from his biggest competitors—the retail chains whose business model Amazon has disrupted with its innovative, customer-serving presence in e-commerce.

Bezos accepted the award from the National Retail Federation, whose members include such major Amazon rivals as Wal-Mart Stores, Sears Holdings Corp., Macy’s Inc. and Target Corp. Within the past year in particular, Amazon, No. 1 in the Internet Retailer Top 500 Guide, has irked major retail chains by encouraging consumers to use their mobile phones while shopping in bricks-and-mortar stores to find lower prices on Amazon.com. Target for one has responded to competition from Amazon and other online retailers by offering to match prices on other retailers’ web sites. Target is No. 23 in the Top 500 Guide.

Bezos, in a brief speech before a room of several thousand retailers, said he never expected Amazon to reach its current success, with $48 billion in revenue in 2011 and revenue of nearly $40 billion for the first nine months of 2012, the latest period for which it issued a financial report. “Eighteen years ago I was trucking packages to the post office in my Chevy Blazer,” he recalled. “I can assure you I did not expect to happen what happened.”

But Amazon developed a culture of constantly searching out new opportunities, and finding ways to serve them with innovation, he said.

“We like to invent. We like to pioneer,” he said. He added that he and his teams of technology innovators aren’t afraid to “look down dark alleys,” seeking bright new opportunities, even though some lead to dead ends. Either way, Amazon likes the challenge of exploring, he said.

Bezos also noted that, while he was thankful to be personally honored, Amazon’s success relies on a corporate-wide effort of hard work. “I accept this award on behalf of Amazon employees around the world,” he said. “There are a bunch of people back in Seattle and around the world working their tails off for customers,” he said. “It’s great to get this recognition from this group on behalf of those people.”

Before he left the stage, Bezos gave his rivals a friendly warning that Amazon won’t stop innovating. “We’re still having fun,” he said. “Thank you.”

Bezos left the stage without taking any questions from the audience. Retailers at the conference interviewed by Internet Retailer acknowledged the important role Bezos and Amazon have played in retail innovation and building out a consumer-friendly online shopping experience, but refused to say that Amazon had won the war for the hearts and wallets of consumers.

“Amazon is a great competitor, but we’re all great competitors,” Bill Simon, CEO of Wal-Mart Stores Inc., said after his keynote speech Tuesday, a day after Bezos spoke, in answering a question about the impact of Amazon on the retail industry. He added that Amazon’s focus on the online world leaves opportunities for retail chains to get an edge, by serving consumers in stores as well as online and via mobile channels.

“Amazon lives in a world focused on e-commerce, but we have an opportunity to impact retailing in all channels,” Simon said.

Other retail chain executives said Amazon’s innovation and competition has helped the industry overall, but noted their companies have responded to that competition with their own cross-channel innovation that further sets them apart from Amazon and other competitors.

“Amazon makes us a better competitor,” said Terry Lundgren, the CEO of Macy’s Inc. and the outgoing chairman of the NRF. He added that Macy’s is forging ahead with a cross-channel strategy that includes expanding a program started last fall that fulfills online orders from nearly 300 of the retailer’s stores. That program has worked so well, he said, that Macy’s is rolling it out this year to more of the 840 stores the company operates under the Macy’s and Bloomingdale’s brands. A spokesman added that the ship-from-store program already fulfills 10% of online orders.

“Amazon challenges the retail industry to better identify and meet the needs of customers,” said A.J. Sutera, senior vice president, I.T. and operation, for Saks Direct, the online and catalog division of upscale department store chain Saks Fifth Avenue. For Saks in particular, he said, Amazon is a strong competitor for the wide range of customers who like upscale apparel, accessories and home furnishings and will search the web for the best value.

That has led Saks to build its brand in a coordinated way online and in stores. Although Saks is still in the early stages of developing in-store digital features that complement its web site, he said Saks is excited about the challenge of building a stronger multichannel shopping experience. “We’ll learn from Amazon, and use the digital experience across channels to give a shopping experience better than Amazon’s.”

On the NRF’s exhibit floor of several hundred technology companies, meanwhile, vendors like Cisco Systems Inc. and Intel Corp. were showcasing large-screen digital in-store displays designed to complement retailers’ e-commerce sites.

 

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