It all started with a claim from treasury secretary Steve Mnunchin who said the following: “although Amazon has provided certain benefits to the consumer, Amazon destroyed the retail industry across the United States”. According to Steve Mnunchin, Amazon limited competition and he agrees with the Department of Justice investigating Amazon with regards to abusing its position. But are the claims from Steve Mnunchin true (Ciacci, 2019)?
According to Karl W. Smith the Brick-and-Mortar retail is not matching the growth of online retail. But he thinks there are more reasons behind the decrease in growth. He states that Americans are spending their time differently as they grow older and wealthier. People tend to start companies on a young age, as the United States is aging, it makes sense that the growth of Brick-and-Mortar retail is not matching the growth of online retail. Moreover, older people are more likely to be loyal to traditional brands, hence why new companies have a tough time (Smith, 2019).
Karl W. Smith also responds on the investigation of Amazon. He refers to the United States antitrust law as an institution which protects consumers, not rival producers. He said: “if a large corporation can offer better selection at lower prices than small businesses, that’s an improvement”. The interpretation that big companies itself create problems is winning ground regarding the courts. This would be a big mistake; small businesses are the engine of the United States economy and growth. But if you do not allow them to develop into a big company, the economy of the United States will suffer (Smith, 2019).
In my opinion Amazon is creating a platform for smaller retailers and keeps them alive. Amazon is not destroying the retail industry but reinventing the retail industry. I am wondering if Amazon will be the only big platform in a couple of years. Because for instance Bol.com is changing from a retailer to a platform as well, will they all survive (van Amstel, 2019)?
Sources:
https://www.foxnews.com/tech/amazon-destroyed-retail-industry-mnuchin
https://www.bloomberg.com/opinion/articles/2019-07-29/amazon-is-saving-retail-not-destroying-it
https://twinklemagazine.nl/2019/02/bol.com-platform-first/index.xml