business news in context, analysis with attitude

Yahoo Finance has an interview with Ron Johnson, the former CEO of JC Penney and the man who helped to develop the Apple Store concept, now the CEO of Enjoy, which sells consumer electronics online and then has its people deliver the items, set them up, and show you how to use them.

Johnson says that in the e-commerce world, ““Amazon should be having trouble sleeping at night … I mean, seriously. Amazon same-store sales in the U.S. are now single-digit. Target and Walmart, these big retailers have learned how to leverage their stores’ inventory to create a better shopping experience. That’s where customers are going right now.”

Yahoo Finance puts the observation in context: “Walmart’s U.S.-owned e-commerce growth accelerated 43% year-over-year during the third quarter, while Target posted a record 49% year-over-year surge during the same period in e-commerce growth … Meanwhile, Amazon’s online store sales growth, which factors in product and digital sales, grew at a slower pace during the same period at 12.5% year-over. (The Seattle tech giant also reported a 3% year-over-year decline in physical stores sales - a statistic that included Amazon’s ownership of Whole Foods for the first time.)”

Johnson says, “Up until now, it was easy to go to Amazon because they had delivery. But now Target can do that and do it better.”
KC's View:
As much as I respect Johnson - I often rooted here for what he was trying to do at JC Penney - I resist his characterization of the current situation … largely because it defines the competitive situation as being static. I don’t think there is any question that traditional retailers are going to get better at e-commerce, even as Amazon runs into potholes as it invests more in the bricks-and-mortar business. Nobody should be surprised by this. Jeff Bezos certainly isn’t.

The question is, who adapts better and faster? Which company has a culture that is more easily able to embrace change, and engineer disruption from within? Who has a better view of what retail looks like tomorrow, not just today?

I know how I’d answer that question.