Jeff Bezos: Amazon is still 'small'—90% of US retail sales happen in brick and mortar stores
Amazon has a market capitalization of more than $900 billion dollars. In 2018, Amazon had sales of $232.9 billion, according to financial statements released in January. Bezos, the richest person in the world, is currently worth $115 billion, according to Bloomberg.
And yet, in the Amazon shareholder letter published Thursday, Bezos focused on how small Amazon is compared to the larger retail industry
"Amazon today remains a small player in global retail. We represent a low single-digit percentage of the retail market, and there are much larger retailers in every country where we operate," Bezos writes.
Indeed, annual revenue at Walmart, for example, was over $500 billion in 2018, according to its annual report.
"And that's largely because nearly 90% of retail remains offline, in brick and mortar stores," Bezos says. That's a figure Bezos got from the U.S. Department of Commerce's quarterly report on ecommerce sales, released in March, a spokesperson for Amazon tells CNBC Make It.
Amazon is slowly making a move into brick and mortar, in its own way, with "Amazon Go" stores, where technology eliminates the need to wait on line and pay.
"With Amazon Go, we had a clear vision. Get rid of the worst thing about physical retail: checkout lines. No one likes to wait in line. Instead, we imagined a store where you could walk in, pick up what you wanted, and leave," Bezos writes. "We now have 10 stores in Chicago, San Francisco, and Seattle, and are excited about the future."
Bezos' focus on how much bigger Amazon can get is an indication of the way the tech titan thinks. He pushes his team to chase goals that most people are not even able to imagine.
For example, smart speaker Echo with voice assistant Alexa was released in 2014. At the time, Bezos says, a customer would not have even known to want an anything of the sort.
"No customer was asking for Echo. This was definitely us wandering. Market research doesn't help. If you had gone to a customer in 2013 and said 'Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?' I guarantee you they'd have looked at you strangely and said 'No, thank you," Bezos writes in his 2018 letter.
Since being released, however, the Echo has been wildly successful. Customers have bought more than 100 million devices to run Alexa.
"Much more to come!" writes Bezos of the growth of Echo and Alexa.
The last sentence of his shareholder letter — his 21st — summarizes Bezos's M.O.: "It remains Day 1," he writes.
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