Actually, the direct quote was: "If you look at Amazon, although there are certain benefits to it, it destroyed the retail industry across the United States." I think you might have to race right past the "certain benefits" part to draw the conclusion that Amazon "destroyed the retail industry."
Amazon "has destroyed the retail industry across the United States," says Treasury Secretary Mnuchin. "It's absolutely right the Attorney General is looking into" anti-trust issues. pic.twitter.com/z5Mhc96xMa-- Squawk Box (@SquawkCNBC) July 24, 2019
While there are certainly plenty of reasons to criticize the company, and the government has certainly the right to ensure that no company is abusing its position to stifle competition, there is probably no criticism further from the truth.
Target is doing fine. Best Buy posted one of its most profitable years ever. Walmart is going strong.
Oh, wait, you mean the little guy? The ones that have access to literally hundreds of millions of customers because of the platform Amazon built? I'm pretty sure they're doing ok too.
In fact, that they're doing anything at all is the surest sign that Amazon hasn't destroyed anything.
Unless what you mean is that Amazon destroyed the old way of doing things, then I guess I have to agree. But my question is: Who's complaining?
Maybe Sears, which, incidentally is the retailer whose board on which Mnuchin used to serve. Then again, perhaps ironically, people said the same thing about that company when it expanded across the country, putting small-town hardware and appliance stores out of business.
So I'll ask a different question: Was there ever an industry more in need of disrupting than retail? Sure, Amazon has forced tremendous change, but the net result has been better for consumers, for sure. It's also been better for retailers.
It's forced companies large and small to make changes and adapt. Target is now opening smaller stores in urban locations and offering same-day delivery through its Shipt service. Small boutique brands and crafters are selling online through services like Etsy, Amazon's Marketplace, and third-party services like Shopify.
Look, Amazon doesn't need me as a defender, and I've certainly tried to call it as I see it when the company deserves criticism, but its response actually said it pretty well:
Small and medium-sized businesses are thriving with Amazon. Today, independent sellers make up more than 58 percent of physical gross merchandise sales on Amazon, and their sales have grown twice as fast as our own, totaling $160 billion in 2018. Amazon's retail business competes in the worldwide market for retail sales and represents less than 1 percent of global retail and less than 4 percent of U.S. retail. And the vast majority of retail sales -- 90 percent -- still occur in brick-and-mortar stores according to the U.S. Census Bureau.
In fact, if there was ever a sign of how small retailers have thrived as a result of Amazon, look no further than the fact that they sold over $2 billion worth of goods during the two-day Prime Day sale earlier this month. Amazon says that over 1.9 million small businesses sell online using its platform. How many of them were around before Amazon? I don't know the answer, but I'm willing to bet that more than a few exist exactly because they can sell online so easily.
At the same time, if a company is engaging in anti-competitive behavior, it should absolutely be investigated and held accountable. And big companies like Amazon should be held to a higher standard in terms of the impact they have on consumers, competitors, and workers. And when they use their position to an unfair advantage, they should be punished.
I don't have a problem with that.
And Amazon has rightly been accused of some pretty aggressive tactics that, at a minimum, border on the "not cool at all," and at worst, could be illegal. The European Union just recently announced it was investigating the company over its practices around using data about its small business sellers for its own advantage.
And Bloomberg reported earlier this year that the company has made a habit of using search data about top-performing products to introduce private-label versions of its own, often undercutting small sellers on the site.
If that's the case, Amazon deserves what it has coming. But that's still not the same as "destroying the retail industry."
So, at a minimum, could we acknowledge that dominating your competition isn't the same as being anti-competitive?
Retail isn't the same as it was before Amazon, that much is true. It's also not the same as it was before Walmart and Home Depot. It's not the same as it was before eBay, or Sears, or J.C. Penney.
Not all change is bad. Just ask those small businesses still cashing their share of $2 billion this month.