A new perspective: Change is coming to Amazon, as CEO Andy Jassy, who took over the company last July, looks to put his imprint on the retailer.
- Jassy has spent his first year in charge of the entire company, diving into all elements of Amazon’s business, per Bloomberg.
- Amazon has “more work in front of us to get to where we ultimately want to be in our consumer business,” he wrote in a letter to employees announcing Clark’s departure.
- Among the challenges facing the retailer’s consumer division are its overaggressive expansion plans that drove it to overspend on warehouses and staff, ongoing worker safety issues, rising costs, and an unprecedented loss to a union.
Making adjustments: The retailer is changing its approach in a number of ways, including:
- Splitting its stock to make it more attractive to retail investors and employees who receive stock options
- Dealing with its excess warehouse capacity by subletting at least 10 million square feet of space and potentially vacating leases, per Bloomberg
- Shuttering its Chinese ebook store next year after it failed to make significant inroads against local rivals
- Aggressively pushing back against proposed antitrust legislation
Facing headwinds: Amazon is hardly alone among retailers with slowing growth due to an array of economic headwinds that include rising fulfillment costs, ongoing supply chain bottlenecks, and inflation that’s limiting consumers’ buying power.
- That’s why we expect retail ecommerce growth to slow to 9.4% this year, down from 17.8% last year.
- Fortunately for Amazon, the company has diversified its revenue streams to enable it to compensate for slowing growth thanks to its booming advertising business, Amazon Prime membership fees, and Amazon Web Services.