Amazon's Jeff Bezos: Customer-Obsessed and Ready for the Next Wave of Retailing


Jeff Bezos, the iconic leader of (AMZN), doesn't like to use military jargon when he talks about shoppers, and bristles at phrases like "targeting the consumer."

That should come as little surprise, given that the corporate culture of the e-commerce pioneer he founded has always been a little different from those of traditional retailers.

As the keynote speaker at a summit held this week by ShopSmart, Consumer Reports' shopping magazine, the head of the nation's biggest online merchant spoke with an uncensored wit and a candor unusual from a CEO -- no rah-rah company boosterism -- about his idiosyncratic business philosophies, management strategies, Amazon's growth opportunities, and how digital technology -- including mobile or "thumb" shopping -- is reshaping retailing.

Here are some highlights:

The Future of Online Retailing

"The most interesting trends in online retailing that speak to how we will be shopping is more and more, over time, people will be buying from tablet computers and mobile devices," Bezos says. Compare that to just 15 years ago, when most households had a single desktop computer, "and they didn't keep it on."

"It's unbelievable the transformation," Bezos says. "We're seeing this huge expansion in the wireless world, it's very exciting for us."

As smartphone processors get faster and the devices become more commonly used as shopping tools, "that's a big area that we'll be [innovating around]," he says.

But Bezos is still scratching his head as to how Amazon can tap into the sales potential of social networks. "There seem to be opportunities there, but it's not obvious what those are," he says. About 15 years ago, the retailer tested a feature where shoppers could see what their friends bought. But the idea was ahead of its time and didn't fly, he says.

Growth Initiatives, the members-only fashion web site Amazon launched this month, has the potential to change how people buy clothes online, Bezos says.

Sponsored Links

The spin-off is Amazon's answer to upscale "flash sale" websites like Gilt Groupe and Rue La La, which offer big discounts, usually for 36 hours to 48 hours, on upscale, designer merchandise in limited quantities.

But unlike those and other e-commerce sites that display still images of the clothes, uses 360-degree video footage of the model wearing an outfit. The model does a full-turn on the page, "which is incredibly useful" to see how any piece of apparel -- be it a dress, blouse or pair of pants -- "hangs, drapes and moves on the figure," Bezos says. "You can't get that from a still photo."

(The videos also include the model's height and measurements and the size she's wearing.) Amazon's approach could usher in a new wave of sophistication in e-commerce and dictate what the next generation of retailers' sites could come to look like, Bezos says. The concept is "good for the consumer and good for the retailer," as it will reduce clothing returns, he says.

Amazon will also grow by expanding existing product categories, as it already sells pretty much everything, Bezos says. "Our goal is to have every single product that you might want to buy available for fast delivery."

The Biggest Misconception About Amazon

"A lot of our customers still don't know that we sell more than books," which illuminated for Bezos "just how busy they are," he says. "We're not that important to people."

And speaking of the category that put Amazon on the map, the Kindle e-book reader, which has been criticized for not being built to download books from the library, will be equipped to do just that before the end of the year, he says.

Customer Service vs. Competition

Amazon's main driving principles are "customer obsession," long-term thinking, a willingness to invent, but also "a willingness to fail and be misunderstood," Bezos says.

Amazon knows it business decisions will be unpopular from time to time, and that's just fine, he says. "Every time you do something new -- like the electronic book, when we tried to drive down the price point [of a book] -- and some people didn't like that," there's the potential to be misunderstood, "and you have to be okay with that," he says. The company also conducts "hundreds" of experiments daily, and many of them fail, but that's par for the course, he says.

When asked what competitors he worries about, Bezos replied that Amazon decided early on that it would be "competitor alert, but not competitor obsessed," Instead, his company is customer obsessed. "Companies can choose which they want to be. I think both models can be successful.

"The best customer service means the customer doesn't need to call you," Bezos says, noting the most common complaint from Amazon shoppers is, "Where's my stuff?" To that end, Amazon measures success in customer-contacts-per-units sold. "We endeavor to drive that down every year, and the way we're driving that down is by delivering [people's] stuff."

That fixation on customer service appears to have paid off, Bezos says: The company has some of the highest customer service ratings in the retail industry.

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