Slow death for the small?

Recently I wrote a paper on the affects of debt on the public.

When debt becomes the way to gain access to basic goods it forces downwards the expectations and narrows the horizons of debtors (Gourevitch, 2011). Speaking from experience, student debt is a limiting factor on subsequent educational and professional choices; I am less likely to take risks on interesting classes, career choices with riskier or longer-term chances of having a payoff, or that are simply lower-paying. Companies behave similarly. Once public, they now have a responsibility to their shareholders and often develop “safer” product strategies that will more likely to be accepted by the press (who write about them, and in turn influence the market).

Being part of the .com ups and downs, I’ve always admired companies that are innovative, find a way to make life easier and continue to remain relevant. I’ve always been a fan of Jeff Bezos and Amazon from their early days. To me he represents a leader with a backbone, a CEO who is not playing “not to lose” but one capable of making tough decisions. Everyone knows things are different on the inside, but from the outside he appears to have retired products/services when he needed to, runs an analytical organization capable of remaining entrepreneurial, and in a market constantly finding new heights for the consumer–finds ways to continue to innovate. Most importantly, when introducing new services that didn’t quite fit what what the market expected, he told the analysts to back off.

An example of this was Jeff Bezos when introducing new services for Amazon. Like no other Internet or computer company Amazon applies efficiencies of online to assets like products and people.  But he wasn’t always supported by the market. Amazon warned the market that it would lose money as it spent heavily on key projects that may not generate quick returns. Bezos has an entrepreneurial mindset. “He settled on books initially because that’s where the biggest opportunity was” (ibtimes, 2011). In contrast, the Google founders do not like the way Wall Street works and they made that clear by running their IPO as a Dutch auction, depriving investment banks and big institutional investors their usual payday on such deals. “Wall Street has never quite forgiven them for that, Wall Street just doesn’t trust Larry and Sergey. They trust Bezos because he wants to make as much money as possible” (ibtimes, 2011).

So when I read this article I was saddened. Amazon is essentially paying customers up to $5 to go into a local store, scan an item, walk out, and buy the same item on the Amazon site.  Walmart has the decency to say “We Beat All Competitors Prices.” Their offer is:

“The great gift we can give our customers this holiday is great low prices on the things they want most, ” Duncan Mac Naughton, chief merchandising officer of Walmart US, said in a statement. “Walmart is easing shopping stress this Christmas by allowing customers to shop when and how they want, all while guaranteeing low prices through the entire holiday season.”

Most places will match the price of an identical item found for a lower price in a printed ad.  But is reading the paper, clipping out a coupon, and educating the cashier on the latest price the same is physically walking into a store with a scanner and scanning the item in front of the shopkeeper?

What sort of citizenship and shopping behavior is being encouraged here?

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