THE BLOG
10/03/2014 10:45 am ET Updated Dec 06, 2017

Brad Stone Tells Retailers That Amazon Can Kill Them or Teach Them

If anybody knows Jeff Bezos and his Amazon empire, it's writer Brad Stone, who wrote a detailed book about the twin American icons and was introduced at the annual Shop.org Summit this week as a leading Bezosologist.

But if the e-commerce professionals packing Stone's keynote speech were looking for the sure way to beat the Amazon juggernaut, they weren't going to find it in that convention center ballroom. That's not to say there is no way to compete against the Seattle giant and we'll get to that in a minute. (Hint: It's not easy.)

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First, think about this scene: A few hundred of Amazon's competitors crowding a cavernous room to hear tales of the guy who's got to be in the top five on the list of who makes them the most miserable. They listened politely as Stone, a Bloomberg Businessweek reporter who wrote, The Everything Store: Jeff Bezos and the Age of Amazon, said things like:

"Jeff might be one of the best strategists on the Internet today."

"Jeff was the guy who bet the biggest on the Internet and on the inevitability of rapid change that was going to alter the relationship between customers and companies."

"As you know grocery delivery services have been tried many times over the years and have mostly failed to become profitable. Amazon is leveraging all of its advantages to finally make it work."

But what are you going to say? It's basically true. Amazon is a formidable competitor in retail; and it also happens to be in the device game, the content game and in advertising and cloud services, newspapers, groceries and on and on.

Stone is a straight-shooter and so his talk certainly wasn't a Jeff lovefest. He talked about some of the less-than-flattering insights he gained while writing the book, like how it wasn't the other big retailers and Internet businesses that provided Amazon's stiffest competition as it grew into the $74 billion business it is today.

"Amazon's biggest challenge was never eBay or Walmart or Google or Apple," he says. "Amazon's biggest foe has always been chaos, the complexity in its own fulfillment centers."

And he offered an interesting explanation of Bezos' tendency to try new things, beyond selling and shipping products -- trying new things like the Kindle, the Fire phone, even delivery drones. It seems Bezos has given some thought to the way that big discount retailers grow to be feared and reviled; the way they attract bad publicity. And in a memo leaked to Stone, Bezos laid out the attributes that could inoculate Amazon from creating that sort of reaction.

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"One of the ones that he settles on, as maybe being able to influence a good reputation, is being seen as an innovator, being seen as pioneers," Stone says. "So as long as you're not completely viewed as just extracting value, but you're inventing new things and adding value, then perhaps this is a way that Amazon can continue to be loved."

No question, Bezos has built an impressive empire, but turning back to the key interest of the retailers in the room, Stone says that Amazon's retail prowess hardly means it's game over.

"I have no special insights into what e-commerce businesses should do," he told the assembled. "I do think there is plenty of opportunity left in the e-commerce market."

Of course, the retailers listening know that. It's why they keep at it. Why they don't just fold up shop and go home. Amazon is a formidable foe, but also survivable.

Back to that hard part: In general, e-commerce retailers competing with Amazon need to find ways to differentiate themselves, to stand out in consumers' minds, to provide the kind of experience that supersedes price and builds loyalty.

"Today people seek authenticity, sustainability, uniqueness in what they wear and display in their homes," Stone says. "These are not necessarily the values that Amazon optimizes for."

He pointed to outlets like zulily, Wayfair and Etsy, that are "deeply focused on special product categories and are great at making and meeting promises to customers."

As for retailers looking for pointers, Stone had some surprising advice.

"In e-commerce in 2014, it's probably a pretty good strategy to watch Amazon and to learn from them," he says. "Make sure you're betting that the world will change rapidly, because it will. Master the chaos and complexity of your own operations, so you can make precise promises to customers. Invent the future you want to see. Find your own assets and leverage them."

Oh, and one more thing, Stone thought would help: Be a Bezosologist.

Photos courtesy of the National Retail Federation

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Mike Cassidy is BloomReach's storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.