Today was the first full day of my January-term trip (Entrepreneurship in Silicon Valley) to the West Coast. We’re in Seattle, and this morning we visited Amazon’s headquarters.
We met with a guy named Sam. Sam works in the legal operations department, although he isn’t a lawyer. We spent about an hour talking with him about what he does, what Amazon does, and how Amazon is looking at the future of its various businesses.
I had a chance to ask Sam about the areas that Amazon is most concerned about in near future (~5 years), and he gave me three issues (with a bonus fourth).
Privacy and Data Security
The first was issues of privacy and data security, which is really interesting to me. Amazon obviously has a massive database of user information, including the usual contact and financial information that any e-retailer has, but they also have a vast corpus of information about people’s preferences: what they’ve bought, when they like to buy, what kinds of stuff they would probably consider buying the future.
Sam used the example of the recent Target breach to show how quickly a brand can be damaged by a security issue. Amazon has yet to have a large-scale data leak, but that doesn’t mean that people aren’t trying.
A second major concern that Amazon has about the future is a big one (hehe): antitrust. As Amazon gets bigger and bigger, and has its fingers in more and more pies, they are concerned that federal regulators will start to take notice. Sam didn’t elaborate on what Amazon is doing to mitigate the risk, but it doesn’t take much looking to find lots of examples of the results of past antitrust investigations (from the break-up of Ma Bell in 1982, to the web-browser choice settlements that Microsoft has faced in Europe, or the FTC-blocked attempted acquisition of T-Mobile by AT&T).
Sam also mentioned that brand image was a major concern of Amazon. They specifically don’t want to “be seen as another Walmart.” This really isn’t unique, although he tied it strongly to the issue of data security and privacy: a major breach would be devastating to their brand image.
The bonus fourth issue is labor relations. The reason I’m saying it’s a bonus issue is that Sam mentioned this issue as one he personally thinks will be an area of concern. (In other words, Jeff Bezos probably wouldn’t mention it). Basically, Amazon has gotten, and continues to get, a lot of flak over its labor practices.
The aspect of this that I know most about is the concerns over how Amazon treats its hourly employees in its fulfillment warehouses. Called “pickers”, these employees have to work very long hours in very physically demanding conditions, often for low pay. This article is an interesting description of some of these issues.