Alexa, What Was a Mall?
Amazon's Fresh Spin on an Old Idea
I want you to close your eyes and imagine something. Wait, this is text. Have you already closed your eyes? Please don’t, let’s just do this without eye closing. Okay, you’re back? Just imagine, with your eyes open, this scenario: you are at home, and you want to buy a certain product. Instead of getting in your car and going to the store, you browse a number of options from the comfort of your own home. You choose the one that is best for you, provide your payment information, and then it just shows up at your home. What you are probably imagining is Amazon. Likely because you bought something off Amazon this week. But, that’s not what I had in mind.
Last week, I talked about two jobs I’ve held – one in the old world and one in the new world. This week, let’s round that out with one more job, but one that sounds like it was from a fictional world: after college I was a lawn and garden salesman at Sears. This is fantastical. The mall is such a rotting corpse at this point that it’s hard for people who weren’t there to imagine its heyday. And this wasn’t even that – we were almost a decade beyond peak mall – but it was just obvious that you went to the mall to buy stuff. Or to eat. Or to see a movie. Or to hang out. Or to get your exercise if you were a senior citizen. Or just to kill time. And the big attraction at malls were the anchor stores. Our mall had three: J.C. Penney, Macy’s, and the big one, Sears. In the decade I grew up, Sears was the biggest retailer in the country. They had the tallest building in the world. A few years ago they went bankrupt. What the hell happened?
Let’s go back a few more years, because before I ever get paid money by Sears, I was getting paid money by a little company called Amazon. Back when I was far more popular on the internet than I am now – seriously, hit those like, share, and subscribe buttons people – I would use something we now call Amazon Affiliate Links. Essentially, I would link people to Amazon books and they would buy them and I would get credit.
Amazon is not that little online bookstore anymore. I would be wasting your time by doing a little “here’s how big Amazon is” thing. You know. We have a package room in my apartment and it should probably just be called the Amazon room. Let’s just agree that I don’t need to convince you of how big they are, or explain what they do, and we’ll keep this article shorter than usual.
Amazon was also incredibly disruptive. We used to go to the mall, now we just order stuff on Amazon. It’s so different!
Of course, if you’ve read the last two parts of this series – and have even a foggy recollection of the 1980s or before – you can probably guess where this goes next: Amazon pulled this off by doing nothing new. At all. They in fact took the most skeuomorphic route they possibly could: they put the Sears Catalogue on the internet.
If you aren’t familiar with the Sears Catalogue, just imagine Amazon in paper format. It was a listing of products Sears sold which you could mail away money for and get a product back. Now, by no means was the Sears Catalogue the first or only mail order catalogue. Apparently they go back to Renaissance Venice. Benjamin Franklin was a cataloguer. These were a longstanding technology before my former employer – Sears, Roebuck and Company – launched the most famous of these in 1893. But it would be the most famous, earning the nickname “the Consumer’s Bible.” A century later it finally ceased operations – only a few months before the launch of Amazon.
Even if you didn’t use the Sears catalogue, the idea of mail order commerce was not unusual to anyone around the time Amazon launched. From the upper middle class bliss of L.L. Bean and Eddie Bauer to the meats and cheeses of Figi’s Gifts to the unending debt of Columbia House,1 this was not a strange new world to us in the 90s. Catalogue sales still exist today, to the tune of twelve figures in sales every year. A familiar figure even has an exclusive Christmas toy catalog.
Traditionally, we think of the question as “Amazon vs. Brick & Mortar Retail.” And that’s a much tougher comparison. Was the experience of ordering through Amazon different from the experience of walking into a Sears? Absolutely, and in a lot of ways, to its detriment. When you’re purchasing a tangible item, the ability to have tangible contact with it is always going to be of high importance. Not to mention the immediacy of being able to possess the item. I still sometimes drive to the store if I don’t feel like waiting.
But rephrase the question as “was the experience of ordering through Amazon different from the experience of ordering from a catalogue?” and you get a different answer. It’s still “Absolutely” but now it’s also wholly superior. There’s no give and take. All the drawbacks of Amazon – mainly the lack of tactile contact and the inability to immediately possess – are still there. However, the practically infinite storage capacity of the internet allowed for more product information, more product choice, more everything. And, most importantly, speed. It was quicker to buy things and – even in the days before 2 day shipping – it was quicker to get things. Because digitized network communications – particularly involving payment – were superior. As distribution, logistics, and supply chain technologies – with the incredibly innovative Walmart providing a template2 – improved and the scale of Amazon grew – particularly its market power – the benefits kept rolling into themselves. Essentially, brick and mortar dominated mail order because it was better. Then someone found a way to make mail order (by making it electronic mail order) a whole lot better, and we swung back around again. Will it swing back? Hold that thought, because first…
Now, everything we look at has some version of the “Blockbuster passing on Netflix” anecdote. This is no different. Remember that “the Sears Catalogue was ended in 1993 right before Amazon was launched?” tidbit that seemed too cute by half? Let’s top that. All the way back in 1984, Sears joined with CBS and IBM to create a new company. That company would eventually come to be known as Prodigy. For those of you too young to remember GeoCities websites and bulletin boards, that doesn’t mean much to you. Prodigy was a online service provider – half ISP, half web interface, imagine proto-AOL, and went on to become the world’s largest online service provider. They year they reached that milestone was 1993. Did you just pick your jaw up off the floor? In the same year Amazon was founded, the biggest retailer in the world – one built off mail order commerce – also owned the biggest online content provider in the world. They just couldn’t put the word “electronic” in front of “mail order commerce” and they lost everything, and Jeff Bezos became king.
Amazon, due to the Law of Better Products, did change culture, but only in the sense that it revived, mainstreamed, and grew a way people already felt comfortable doing things. Amazon didn’t kill people’s desire to go to physical retail stores. It just made the mail order business so competitive that they became bigger than retail stores. Of course, at the end of the day, time is a flat circle. Just like Sears, and Montgomery Ward, and those other stores listed above, Amazon has made the move from catalogues to brick and mortar (or whatever awful materials we now use in ugly buildings that will be replaced in a decade). First Whole Foods, of course, which led to Amazon Fresh stores. Which led to Amazon Style stores, essentially Amazon Fresh but for clothes, which makes lots of sense because the inability to see how the clothes fit and look on you makes clothes the biggest loser of replacing tactile with digital.3 And of course, Amazon Go.4 In 50 years will people think of Amazon as being primarily a physical store? Will they anchor whatever the future version of a mall will be? Will the tallest building in the world be the Amazon Tower? And will they be overthrown by the next big thing? Since most of us will be dead by then and I can’t be held responsible for this prediction, I’m just going to say yes.
We looked at all the weaknesses with Netflix, Uber, Lyft, and Airbnb. What are Amazon’s weaknesses?5 Most people would consider Amazon one of the most successful, disruptive tech companies on Earth. And not even considering Echoes, Kindles, Twitch, Audible,6 or Amazon Web Services, which, as a rough estimate, is responsible for about 834% of what you see on the internet. Just their core business – selling stuff over the internet – makes them a tech icon. And, Jeff Bezos the richest man in the world occasionally.
And yet, at the end of the day, it’s basically the most awesome Sears Catalogue ever. So, is this it? Is this your king? Is this what a quarter century of disruption has gotten us? Is that all there is? The internet was supposed to be completely revolutionary. Disruption, paradigm shift, other buzzwords about change. Looking at five of the darlings of the tech industry – including one of the contenders for the crown – and have we seen a single Ford Model T? Wright Flyer? Air conditioning? Radio? Telephone? Phonograph? Light Bulb? Motion Pictures? Indoor electricity? These were all in the span of about thirty years! The first half of the list, a decade. We’ve got binge watching Stranger Things and getting wine glasses in the mail in two days. Updated hostels and cab rides in some dude’s Nissan Altima in his off hours. And we call it disruption. Can’t we do more? Or is this, your uncle’s Facebook status updates, and unlimited cat videos all we can hope for from modern tech? Let’s try and answer that heavy question as we wrap this series up next week.
We have a Columbian restaurant here called Casa Colombia. I went there once with a Columbian and tried to explain to them what Columbia House was. It feels impossible to explain to someone who wasn’t there what any of us were thinking or how this company worked. But it was a real thing, I assure you.
As discussed later, literally everyone would consider cool, young, hip, West Coast Amazon an innovative disruptor. But uncool, favored by plebes, rural, Arkansas Walmart is rarely considered that. This is despite Walmart being – and always having been – one of the most innovative companies in America. They’ve arguably disrupted the economy more than any Washington or Silicon Valley based company and they did more to kill Sears and the rest than Amazon. But that’s a far, far less sexy story. Armies may march on their belly but no one wants to read about logistics.
This is also being worked on in other ways. I once pitched a VC I know socially an idea for a mirror that uses AR technology to show you how clothes you’re shopping for online would fit and look. She told me this has already been pitched to her and multiple companies are already working on this. The lesson, as always, is that I’m stuck being a lawyer until the day I die.
To reference a previous footnote, you can guess who else is doing this. And, since they don’t care about looking like a technology company and just care about sales, I would not at all be surprised if they end up introducing innovative tech to a much broader base of people, including the technophobic.
I’ve intentionally ignored any negative externalities, which all of these companies have. That’s for the future.
If I had more space and it fit I’d talk about how these are actually disruptive technologies. If Bezos wants to slide me a check I’ll gladly do a series on “How Amazon Changed the World.” Hit me up.
Remember how getting mail was a fun awesome thing but then we all switched to email and texting and now we pay for the fun awesome mail?
I didn't know that Sears owned Prodigy. I got my first computer in 1994, and it came with it. I was in my late 20s and starting to have disposable income, but there was no way in hell I would have put my credit card info into that mysterious and often malevolent unknown. So I can understand why it may not have occurred to managers at Sears.
As to Wal-Mart, the story might end up more gripping over time as the logistical miracle case study makes room for the ruthlessness and exploitation morality tale.