Nordstrom is a great chain of department stores in the USA. What began as a shoe store with enormous selection and fanatical service, expanded to provide a wide range of high-quality men’s, women’s, teen and kid’s clothing. I often gets calls from a salesperson at Nordstrom telling me about new stock that I may be interested in based on past buying behavior. Nordstrom has a no-questions return policy. They only sell shoes, clothes, cosmetics, decorative jewelry. Focus+selection+service. Perfect. No kitchen wares, no appliances, no furnishings, no distracting categories that confuse the focus of management with the inevitable repercussions to the bottom line and the stock price. The don’t have a line of cash registers.
I was thinking of Nordstrom when I read this prediction by John Battelle for 2007:
7. Amazon will continue to push beyond ecommerce into web services, the market will punish it for doing so, and by the end of the year Bezos will be forced to defend his investments as his stock takes a hit for those services’ failing to find traction. It’s not that I don’t believe in Jeff’s vision, it’s the track record with things like Alexa and the very real sense I have that the market for what Jeff’s selling is not yet fully baked.
Remember when Amazon just sold books (=shoes)? They had an enormous selection. I remember a radio ad back in the day about Amazon wanting to rent out the Superdome in New Orleans to store all those titles. They used to suggest titles based on past book-buying activity. The return policy was easy. All these things are still true. Heck, they may have learned all this (focus+selection+service) from Nordstrom, another Seattle, WA -based retailer, who doesn’t have a line of cash registers.
10 Comments
It’s interesting to compare the two but I’m missing the point of the comparison.
@Emile: Nordstrom has stayed focused. Amazon has not.
And then Amazon releases Endless.com, an online brand that focusses solely on shoes and accessories.
@Steve: I rest my case. The snake eating itself.
It’s a bit troubling that this post can be interpreted as a sideways-slam at Amazon, who with EC2 and S3 is breathing directly down the neck of Joyent’s On-Demand Container (Accelerator?) Hosting. Big difference, of course, being that Amazon has Amazon as a reference implementation—which should be enough to give any potential competitor pause.
And? Have there yet been any negative repercussions other than speculation by Mr. Battelle (which isn’t very worrisome )?
I’d hate to think that you guys are laying on a subtle ‘I’m just saying’ layer of FUD.
(disclaimer: I’m a member of the VC200 and operate a hosting company, but don’t consider myself in competition with either Joyent or Amazon)
isn’t this just a repost of your podcast thoughts? Why do you care what Amazon is doing? Just make your products the best they can be and don’t worry about it. Posts like this make it seem like you’re scared of the competition.
David
I’m sadden that you guys don’t post more often.
@Sean: There may be stock price repercussions for Amazon if their foray into web services does not pay off. Once lost, market confidence i.e. valuation, can be very difficult to regain.
What Amazon needs to do is ally with EBay to use Amazon sellers to replace EBay’s failed “EBay Express” initiative.
#1 problem with Amazon is that its difficult to tell what comes from Amazon and what comes from third parties. Bad practices by third parties affect Amazon’s reputation.
Web services aren’t too much of a distraction, because they represent infrastructure work that Amazon needs to do anyway. If anything, the Amazon services like S3 & EC2 are brilliant ways to monetize slack computing resources that are only needed for Amazon’s peak periods.
Battelle is measuring the future by today’s standards. The current trend in financial markets has been “do one thing well” for awhile now. That trend is likely to reverse itself as war spending starts pushing up inflation and investors want companies to diversify again.
“I often gets calls from a salesperson at Nordstrom telling me about new stock that I may be interested in based on past buying behavior.”
I used to get similar spam from Amazon, too. I don’t consider it a virtue in either case. I want to be left alone.