Politicians And Certain Analysts Hate Amazon: Are They Woke? Or Knee-Jerk?
Last week, Elizabeth Warren called for the breakup of giant “tech companies” Amazon, Google and Facebook. I intentionally put the words tech companies in quotes, since last I checked (about five minutes ago), the lion’s share of Amazon’s revenue comes from its various retail operations. Its profits mostly come from its AWS hosting services, so it really does beg the question, “Why lump Amazon in with these other companies?”
I watched Senator Warren being interviewed on MSN, and she kept focusing on size. When asked to provide one-word answers to each of the company names, she first asked to use two word answers, and those answers were consistently, “Too big.” When asked about Marc Zuckerberg she said, “Too powerful.”
I confess, I’m confused. The call for a breakup would have made more sense if she’d highlighted the amount of data these companies gather, on both witting and unwitting people. We’ve learned that Alexa, Siri and Hey Google are all listening to conversations, basically waiting on your commands, but also gathering the other words that are spoken, and using those words to serve up ads to you. That should have led to requests for initiatives like GDPR in Europe – everyone has the right to be forgotten. We will see a state law go into place in California (the California Consumer Privacy Act or CCPA), soon that pushes for the same goals. That would have been in line with her history as a consumer protection advocate.
But she focused on “bigness.” Bernie Sanders before her focused on Amazon warehouse wages when he introduced his “Stop BEZOS” bill, which was meant to target corporations with low wage employees.
So why am I confused? Both Mr. Sanders and Ms. Warren seem to have missed the most essential issues, and for reasons I don’t quite understand, are letting giants Walmart and Exxon (for example) off the hook. Walmart is four times Amazon’s size in actual revenue. I’m going to be bold here and say it is doing a lot better job figuring out how to sell online than Amazon has thus far figured out how to sell in brick and mortar stores. I will also say the company has worked hard to improve its image over the past three years, and frankly, is doing a really good job of it. So good, that both Mr. Sanders and Ms. Warren forgot all about it.
Now, this is not really about politics. I am not opposed to either Mr. Sanders or Ms. Warren. I will say the person who gets my vote in the primary will be one who can demonstrate that he or she genuinely understands technology. So far, I don’t believe we’ve had a single U.S. president who does.
Why does this matter to retailers? Sooner or later (my hope is sooner), we will end up with a president who DOES understand the implications of technology and how to use something more than a Blackberry or knows how to tweet on a who-knows-what phone. When that happens, retailers will have some ‘splaining to do.
As I was looking for data to discuss this week, I came upon an interesting piece on CNBC’s web site. The title? “Retailers can track your movement inside their stores. Here’s how (sic).” Now, you have to work your way down to discover that most of this activity is happening in China, but the click bait is out there.
Once again, I read a justification in that article from a consultant saying that consumers have “privacy fatigue” and they just accept privacy no longer exists.
My friends, I really, really encourage you to ignore these kinds of statements. There is ZERO data to indicate that they just accept it, at any age. We’ve run consumer studies and found that while older consumers REALLY hate privacy infringements, younger demographics are not all that thrilled with it either. The mantra is always “Consumers are willing to trade privacy for relevancy.” Really? You mean like the relevancy of ads being served up to you because your phone has heard you mention something about a particular category of product? Bring us the data. Are privacy laws being passed just because there are old people in politics? I don’t think so.
The point of this story is simple. People do not like their privacy infringed on. There are things that become “a bridge too far.” As retailers, it’s incumbent to determine where that bridge lies, and stay the heck away from it. Not blindly, but armed with data about consumer attitudes. And by being transparent about what you’re doing and when you’re doing it.
The issue isn’t monopolistic behavior. The issue is intrusive behavior designed to change the way we think and act: marketing on steroids using “big” and “little” data to come to conclusions. This is the problem. That data has fallen into the wrong hands before. It can happen again. I expect this year to be privacy-noisy….even if it starts out by a politician saying companies are “too big.”
Now, to be fair, there are analysts who really don’t like “the Four.” This week, analyst Scott Galloway said about Facebook (among other things):
Senator Elizabeth Warren outlined her thoughts on the breakup of big tech yesterday. It's the most cogent argument to date from any presidential candidate (low bar), and it cements her position as the intellectual leader of the Democratic Party. Democrats would be wise to rally around the breakup of big tech, vs. the aspirational, verging on insane, Green New Deal.
Clearly he’s a better listener than I am (or maybe we all just hear what we want to hear). The bar may be low, but it needs to go MUCH higher.