Andy Jassy’s two years as Amazon CEO haven’t been the easiest — layoffs, unionization and a fight to return to office filled his tenure.
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Despite that, the boss of the e-commerce giant insists he is “optimistic and energized” about the company’s future, according to his 2022 shareholder letter published Thursday.
Jassy acknowledged the tough macroeconomic headwinds Amazon faces, but outlined a number of markets where the organization was looking to win the lion’s share of sales.
Despite acknowledging the company’s roots first in books and later gadgets, Jassy said the Big Tech giant will continue to grow through “constant” change.
“When I joined Amazon in 1997, we had booked $15 million in revenue in 1996, [and] was a bookseller, he wrote.
“Building a business around a set of technology infrastructure services in the cloud wasn’t obvious in 2003 when we started pursuing AWS, and it still wasn’t when we launched our first services in 2006. With virtually every book at our fingertips on 60 seconds, and then being able to save and retrieve them on a lightweight digital reader wasn’t yet ‘a thing’ when we launched the Kindle in 2007, nor was a voice-powered personal assistant like Alexa (launched in 2014).”
“Change is always around the corner,” he added, before setting out his plan for Amazon to meet its customers’ most basic needs – focusing on food, office supplies and healthcare.
Despite closing some of its self-checkout stores in Seattle, New York and San Francisco this month, Jassy seems confident that food retail is a place where the brand can dominate.
The grocery sector is worth $800 billion in the US alone, he pointed out, with the average household shopping three or four times a week.
“We offer more than three million items compared to a typical supermarket’s 30,000 for the same categories,” Jassy wrote. “Amazon Fresh is the brand we’ve been experimenting with for a few years, and we’re working hard to identify and build the right mass grocery format for Amazon scale. Grocery is a big growth opportunity for Amazon.”
In 2017, Amazon also completed the purchase of Whole Foods Market for $13 billion, which now has more than 500 locations.
Jassy used Whole Foods as an example of how the in-house brand could similarly thrive: “Whole Foods Market pioneered the natural and organic specialty grocery concept 40 years ago. Today, it is a large and growing business that continues with raising the bar for healthy and sustainable food.”
He said Whole Foods was on an encouraging path, but to grow further, he said the company needs to find a “mass grocery format that we believe is worth expanding broadly.”
Utilization of return to the office
Major employers are cracking down on getting workers back to their desks, with the likes of Starbucks, Google and JP Morgan mandating that employees return a certain number of days a week.
So, despite predictions that about a fifth of American offices will be vacant by the end of the decade, Jassy wants to capitalize on the potential resurrection of the stationary closet.
Amazon Business — a service that offers organizations wholesale office supplies and bulk goods — now drives about $35 billion in annual gross sales, Jassy revealed, with its six million active users, including 96 of the global Fortune 100 companies.
“We believe we’ve only scratched the surface of what’s possible to date and plan to keep building the features our business customers tell us they need and want,” he wrote.
A big departure from e-commerce
Although he was a supporter of innovation, Jassy emphasized that Amazon’s adventure in the health world had started from a point that felt more comfortable: pharmacy.
Drawing on Amazon’s classic positioning of a high street competitor, the CEO wrote that the launch of the service in 2020 was a result of continued pressure from customers who “expressed frustration with current providers.”
In 2022, the company took the next step in healthcare with the acquisition of One Medical, Jassy reasons that primary care is the “widespread first stop on the patient journey.”
Despite pulling back on her brick-and-mortar stores, Jassy praised the surgery’s combination of virtual and in-person appointments, claiming One Medical’s existing relationships with local hospital systems make “seeing specialists easy.”
When the service was announced, its competitive $144 teaser price — a 28% discount for the first year — spooked the industry, and antitrust groups urged the Federal Trade Commission to block Amazon’s purchase of the company, fearing it would dominate the market.
Jassy seems undaunted, adding, “We are confident that One Medical and Amazon will continue to innovate together to change how primary care will look to customers.”
This story originally appeared on Fortune.com
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