Bank of America – Jeff Bezos to step down as Amazon CEO 

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Jeff Bezos, founder,  Amazon

Amazon.com Inc. announced today its founder and CEO Jeff Bezos will step down as CEO in Q3 2021 and transition to executive chairman of the board. Andy Jassy, current CEO of cloud computing unit Amazon Web Services, will take over as Amazon’s new CEO.

Under Bezos, Amazon grew from a bookseller to the largest U.S. online retailer, generating $386.06 billion in 2020 and boasting a net income of $21.33 billion. Amazon’s online retail sales, which includes revenue it generates from its own inventory sold online in addition to commissions and fees it collects from marketplace sellers and from subscriptions it offers to consumers, like its Amazon Prime membership, totaled $302.99 billion in 2020. These figures exclude its sales from Amazon Web Services. Amazon’s retail sales alone represented a third—33.7%—of all U.S. ecommerce sales growth in 2020, according to Digital Commerce 360 estimates.

Bezos credits this success to invention.

“Amazon is what it is because of invention,” Bezos said in the release. “We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice and much more.

“If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

Amazon dominates the ecommerce industry and built a foundation to ensure its continual success.

For example, Amazon’s paid membership program, Amazon Prime, boasts 126 million members, according to survey estimates from Consumer Intelligence Research Partners (CIRP). The $119 annual membership gives consumers benefits including free two-day shipping, free grocery delivery, access to digital entertainment, photo storage and more.

Once a shopper is a member she is unlikely to cancel her membership. For example, 64% of consumers who sign up for a trial membership convert to a paid membership, according to CIRP, and 93% of consumers continue to pay for the program after one year, while 98% stay signed up after they’ve been Prime members for two years.

One of the perks of the Prime membership is two-day (or faster) free shipping. Amazon is able to guarantee this by controlling its fulfillment network with hundreds of logistics facilities and delivering the packages itself. In 2019 Amazon delivered 2.3 billion of the 4.5 billion parcels it shipped to U.S. consumers, according to a report from Bank of America Global Research.

Today, Amazon’s dominance is much more than online retail. Its cloud computing unit Amazon Web Services is the main source of its profit and operating income. It operates dozens of physical stores, including book, grocery, general merchandise and convenience stores, as well as owns and operates the Whole Foods grocery store chain.

“Jeff Bezos revolutionized online shopping,” says Don Davis, editor at large at Digital Commerce 360. “And he built on that base to transform not just retailing but the way organizations of all kinds manage their computing resources by making Amazon Web Services the world leader in cloud computing. Now he’s taking on the major delivery services. It’s an extraordinary quarter-century of accomplishment.”

And Bezos promises Amazon will continue to impress.

“Amazon couldn’t be better positioned for the future,” Bezos said in a letter to employees, according to CNBC. “We are firing on all cylinders, just as the world needs us to. We have things in the pipeline that will continue to astonish. We serve individuals and enterprises, and we’ve pioneered two complete industries and a whole new class of devices. We are leaders in areas as varied as machine learning and logistics, and if an Amazonian’s idea requires yet another new institutional skill, we’re flexible enough and patient enough to learn it.”

Amazon is the No. 1 retailer in Digital Commerce 360’s Top 1000, a ranking of the largest North American online retailers.

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