Amazon has been taking it on the chin lately, mostly because of negative publicity from our Tweeter In Chief. From its high of about $1,610 per share in mid-March, AMZN drew down about 16%, and it may not be finished with its drawdown. Investors are concerned that the negative publicity could lead to increased regulatory scrutiny. More government scrutiny is not good for business.
One of President Trump’s criticisms of Amazon is that it is hurting “traditional retail”. I don’t think this is arguable. I also think Wal-Mart has done more to hurt traditional retail than has Amazon. I’m sure I am like a lot of people who enjoy strolling around a pedestrian retail area looking at all of the stuff for sale in all of the stores. The key word is “looking”. That means not buying. Smaller boutique stores have a difficult time competing against big retailers and against Amazon. However, if you want smaller boutiques and pedestrian retail areas to survive, you need to support them by buying stuff from them. It is in all of our collective hands to keep these parts of our culture in business.
I am not a Retail expert. I am not as familiar as many others with the metrics of what makes a good retailer these days. This article in the Wall Street Journal equates Amazon with “progress”. Progress from what? When you want to go for a walk, maybe to look at Christmas decorations and do some shopping for your family, do you go to an Amazon warehouse? Even a mall, for all of its shortcomings (all the same stores, crowded, no parking, all indoors), at least provides a sense of community. There are progressive elements to Amazon – more inventory, delivers to your house, easy payment – but Amazon does not contribute to the sense of community.
I don’t think there is enough animosity out there against Amazon that it will lead to significantly more governmental scrutiny. I do think people need to support their community by buying stuff at their local businesses. I am not at all critical of Amazon and I certainly don’t think they deserve additional attention from the government. I buy a lot of stuff from Amazon, but I could buy more, such as all of my groceries. I still enjoy “going to the store” and I know that if there is going to be a store to go to, the store must make a profit on stuff that I buy there. Maybe the Millennial Generation is different, but I doubt they will be as they get older.