Tags: McGhee | Amazon | Bezos | customer

Fiscal Times' McGhee: Amazon Needs a Holiday Makeover

By    |   Friday, 05 December 2014 02:08 PM

Amazon isn't exactly struggling this holiday season, but on the other hand, the online retail goliath may be approaching a turning point in its corporate life as cracks appear in its foundation.

The company has been posting sharp sales gains for its Kindle e-reader and its Fire tablet devices this year as compared with the 2013 holiday season, but offsetting that is the fact it recently posted its worst quarterly loss in a decade and Moody's has cut its rating on Amazon's hefty debt.

"Amazon is at a point now where it needs to sustain customer loyalty, while at the same time reassure its investors that all that money that is being spent is being put to good use," financial writer Suzanne McGhee wrote in a column for The Fiscal Times.

McGhee noted the most recently quarterly loss of $437 million left a bad taste in the mouths of some investors, who have driven the share price down sharply, from $400 in January to only $311 Friday.

"Whoa, Nelly. It forces usually short-term oriented investors to ask themselves just how long they are willing to wait in order for [CEO Jeff] Bezos to achieve his goal of global retail domination — and perhaps to question whether that goal is really achievable."

Given its financial performance, billionaire short-seller David Einhorn recently suggested Amazon belonged in a "bubble basket" with other overpriced stocks, CNBC reported.

"If it were just the dollars and cents, perhaps investors would be less jittery. But around the margins, there are signs that Amazon's once-dominant position is more vulnerable," McGhee noted.

She explained that at the tablet end of the mobile device spectrum, Apple now has an 80 percent market share, with Amazon far behind in the pack that includes other rivals such as Samsung and Google.

"And as Amazon's ambitions grow — as it tries to hang on to its customers, to get them purchasing more, whether by upgrading to the newest device or persuading them to try a newly launched service like Amazon Fresh — the sheer breadth and scope of its ambitions are starting to alienate customers," McGhee asserted.

She noted that in England, thousands have signed up with protest site Amazon Anonymous www.amazonanonymous.org/about/ and taken up a pledge to do their holiday shopping elsewhere.

McGhee also cited a highly critical article about Amazon in the New Republic that proclaimed the online retail titan must be stopped. "It's too big. It's cannibalizing the economy. It's time for a radical plan," shouts the article by New Republic Editor Franklin Foer.

At The Washington Post, which is owned by Bezos, a new piece by consumer technology reporter Hayley Tsukayama hinted Amazon is looking to burnish its brand.

"Amazon.com announced Thursday that it's launching into a whole new world of ethically sourced, Amazon-branded products for the home — starting with diapers and baby wipes," Tsukayama wrote.

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Amazon isn't exactly struggling this holiday season, but on the other hand, the online retail goliath may be approaching a turning point in its corporate life as cracks appear in its foundation.
McGhee, Amazon, Bezos, customer
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2014-08-05
Friday, 05 December 2014 02:08 PM
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