“He’s losing his Covid bump so he thinks the sky is falling.”
As executive chairman of Amazon he has the ultimate access to any daily sales reports he wants. Amazon’s reporting and data analysis systems are some of the most sophisticated on the planet. Amazon, as one of the largest retailers in th world has the ability to see how consumer are spending in real time. It can also see and analyze trends regarding the level of traffic, the average size of purchases, and the abandonment of shopping carts. It can also see substitution of cheaper items for more expensive items based on what the customer looks at versus what he/she buys. Through its Amazon Web Services division Bezos can see the level of web traffic for many companies and thereby estimate the level of commercial activity at those companies.
Retailers see the slowdown before government statisticians who see statistics after they are published. If Bezos is issuing a warning you can bet the bank the numbers he is looking at are awful.
For many retailers the Christmas holiday period generates 40% of annual sales volume, and often more than 40% of profit. If a retailer “misses” Christmas the year is trashed. This fact certainly makes the Bezos warning ominous. If the number look bad at Amazon, what must they be at other retailers?
With respect to retail, if Christmas turns into a bust, the first quarter will be a bloodbath because deep markdowns will be required to sell off the excess inventory remaining. If closeouts extend into February they will suppress sales of spring merchandise which is typically put on display about February 1. Slow sales in February will result in order books being slashed, which in turn will reduce demand throughout supply chains.
Bezos sees many young people in their 20’s and 30’s are about the feel the bit of a deep recession for the first time. It will be interesting to see how the woke mob handles mass layoffs, months of fruitless job search, and possibly having to take a job at 50% of previous salary in order to feed the family. Will economic pain result in a hard dash of reality and a more, dare say it, conservative outlook on life? Deep recessions have historically affected consumer behavior for years.
“ the number look bad at Amazon, what must they be at other retailers?”
Proportional increase at brick and mortar after Covid hysteria cuts in to Amazon share.
My comment does not mean anything you just wrote,na very good post, is necessarily untrue.
But even in a great economy, people not being scared of Covid anymore would cause Amazon to take a hit in market share.
Btw, how many shares of Amazon do you have?
I agree with you on many levels having been in retail for decades.
Many in the tech sector that were/are making over 100,000 are going to find themselves really suffering and needing to move out of the ‘high rent’ districts of life.
And their ‘woke’ attitudes will not get them very far in the real world of work. (ouch)
Amazon had a boom because of Covid and now that’s falling as expected. But what is not expected was the recession on top of that. And that is where I think Bezo’s is giving the canary in the coal mine warning to those who have not been paying attention.
Overstock is everywhere right now. Walmart and Target have containers in the back parking lots of product because the stores have nowhere to put it. Orders have been drastically cut all across the board.
It is not just Amazon. Cuts are coming in January for even the brick and mortars after the selloff of inventory.