So I went to the mall yesterday….
(I know, strange sensation, hadn’t been since before COVID in March)
It looked like a ghost town.
I literally thought that the mannequins in the stores were real people more than once, because I just couldn’t wrap my head around how few people there were there…
Here’s the devastation of malls played out in a few headlines…
There’s many more where that came from.
The thing that I don’t think people understand though?
Monopolies are RUTHLESS.
And make no mistake about it…
This pandemic has CEMENTED Amazon’s place at the TOP of the online shopping pyramid.
It is a TRUE MONOPOLY in the industry.
Which means EVERYONE ELSE (yes everyone) will continue to get eaten by Amazon’s dominance.
You don’t have to look much further than the YTD stock price of Amazon to notice that the smartest people on Wall-Street think that Amazon’s dominance will only accelerate now that this has happened.
Here’s Macy’s chart, for comparison…
Yikes. As a business owner, it make’s my HEART HURT for physical businesses like Macy’s.
Because as an owner, I know the TRUTH.
And the truth is not pretty.
Retail is dead.
No seriously.
It’s not suspended…
Or “locked down”.
It’s not a “new normal”
It’s just DEAD.
Here’s why….
This is one of my favorite quotes from one of my favorite books, Peter Thiel’s “Zero to One”.
When I was walking around the mall yesterday, it struck me how much more convenient Amazon is.
I pictured myself as the “search bar” for the mall…
My wife was looking for jeans for her mom for her birthday.
So I started walking around looking for jeans…
JEESH, I learned within about 2 steps that…
HUMANS ARE TERRIBLE SEARCH BARS….
It took me 45 minutes and thousands of steps to find a pair of jeans that the Amazon search bar would have found in less than one second.
NOT ONLY THAT.
The one second of Amazon searching would have provided THOUSANDS of REVIEWS, so I knew if what I was buying was good.
And it would have AUTO-SORTED the BEST jeans to the top.
God only knows if those jeans I found in the mall were the best, I was just happy to find them at that point!
When you think about it that way, that physical stores are literally just a big ole Amazon warehouse, and you’ve replaced YOURSELF as the SEARCH BAR, you start to understand Amazon’s competitive advantage.
It’s not 10x better than retail.
It’s not 100x better.
It’s honestly probably 10,000x better….
So based on Peter Thiel’s quote above, we can conclude that Amazon has one of the most BULLETPROOF monopolies not just right now.. but in the HISTORY OF THE WORLD.
A monopoly that strong is not going to allow losers to stay alive.
It’s going to stomp on them until they cease to exist.
Most don’t understand this.
Most think that malls will “make a comeback”.
They won’t.
The economics don’t make sense.
The sooner we all start to understand this, the sooner we can PIVOT.
As entrepreneurs, we MUST pivot ourselves to BENEFIT from this pandemic and the Amazon monopoly, not just sit back and wish for the “good ole days”.
The “good ole days” are gone.
Amazon is here.
Let’s take advantage of it.
See you tomorrow!
Kale
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