I hate to lead any article about Amazon with “the numbers,” because they suck all of the oxygen out of the room, to use a popular phrase. And whatever the current numbers are, they disappear in a nanosecond anyway, replaced by new jaw-dropping numbers. Thus, a flywheel comes to mind. Envision the world as a flat platform, (not Thomas Friedman’s version in his epic book, The World is Flat). This platform has a giant Amazon nameplate reaching from one end to the other. Under the nameplate resides a dynamic flywheel that sucks in new products, services and all things commercial. It then spins them out to millions of new customers every day seeking convenience, value and speed. This attracts more new products and services, which attracts more new consumers, which attracts more new…get it? A flywheel that never ends. It keeps gaining more speed by sheer momentum. And it keeps sucking up more oxygen. Retailers in the old world are beginning to choke, with the exception of Walmart who might actually end up choking Amazon.

Money seems to have nothing to do with this 21st-century phenomenon of an Amazon paradigm disrupting, destructing and seismically shifting the marketplace. We’ve never seen this business model before. Certainly, making money (AKA profit), has nothing to do with it. From day one, Jeff Bezos viewed revenue as having one purpose: to get big fast. And it just so happens that in his strange worldview, every day is day one. Therefore, the Amazon flywheel sucks up everything within its grasp, and if you happen to be a competitor, it will either use you to its advantage or crush you.

In 1998 Bezos told shareholders that Amazon “may make decisions and weigh tradeoffs differently than some companies…at this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.”

Old world retailers are now forced to compete on a playing field that is not level. All good Capitalists, they have to make a profit. Amazon does not. The old world redistributes the cash generated across the total enterprise to fuel the businesses that are growing. At the same time, they take huge losses in many of the businesses and services they choose to keep in the spaces where they continue to compete in. For example, one estimate from Business Intelligencer has Amazon losing $7.2 billion in shipping last year. And it is selling its new Alexa virtual assistant at, or below, cost. These are just two of the hundreds of business defying examples.

Talk about an un-level playing field, whole industries have become loss leaders because of Amazon. Simply the mention Amazon’s acquisition of Whole Foods sent the stock valuations of the major players in the entire grocery industry into a tail spin, tanking in aggregate by $12 billion within two hours.

In case you missed my blog last week, check out the sobering chart showing Amazon’s market value as larger than the eight largest legacy retailers combined, including Walmart.

Q3, 2017 Numbers

Ho hum, here we go again. According to Internet Retailer, in Q3 2017, Amazon accounted for more than 40 percent of total U.S. e-commerce sales, sucking in about $44.5 billion of the total $107 billion. So what? That amounted to nearly 70 percent of the YoY growth in Q3. That’s what.

Let me be clear. “So what” means that the numbers mean nothing. As I said, Amazon will continue their flywheel oxygen-sucking momentum until they stop. And I don’t believe anybody has any idea of when that will be.

In Q3, total U.S. e-commerce sales grew 15.5 percent year-over-year, while total retail sales increased what was considered a strong four percent YoY. Strong is a relative word, is it not? E-commerce is growing three times as fast as in-store growth. Amazon has been growing at a rate of 20-30 percent a year since inception.

Amazon’s Thanksgiving and Black Friday

Amazon won 45 percent of all online sales on Thanksgiving Day and 54.9 percent on Black Friday, according to Dealerscope. That equated to 12.78 million transactions over the two-day period and 7.14 million on Black Friday.

Old World Omnichannel Advantage

The old-world players who are getting omnichannel dynamics right are also growing e-commerce in the double digits. And as stated in almost every blog I have written, these old-world retailers currently have an ironic first-mover advantage with their physical and digital combo. These retailers are advised not to squander this advantage while Amazon begins to race into the physical world. To parachute Walmart into this conversation, they achieved 50 percent YoY growth in their e-commerce sales in Q3. You naysayers of the Jet.com deal can now eat some crow. And you read it here first: Walmart’s creating their own flywheel. They are already a big oxygen-sucker, so, Mr. Bezos, if you hear the whoosh of velocity on your tail, don’t look over your shoulder. You might start to choke.

Nevertheless …

Amazon has already created its own gigantic space in the history of the world. Just as Henry Ford created an indelible world vision enabled by the tools of the Industrial Revolution (thus stamping his name in world history) Jeff Bezos is also creating an indelible stamp enabled by the tools of the Technology Revolution.

However, it’s easier to define what Henry Ford created: a new mode of transportation called an automobile. Amazon is more complicated. Even though Bezos originally envisioned a store that could sell everything, defining Amazon’s current business model as a store is clearly a misnomer. It is not a traditionally defined retailer, although retailing is one part of the total enterprise. Amazon is a game changer that has disrupted nearly every aspect of what we once considered retail and store.

Amazon is an unprecedented logistics, personal data and distribution platform that can intake anything and everything in the world, across all industries, can house it all, and out-flow any and all of it, on demand, to each and every consumer, with unprecedented speed and precision. Analysts and legal experts agree that Amazon is unique in the history of global commerce. No other company has ever had Amazon’s powerful synergy of consumer insight and infrastructure. Therefore, the flywheel accelerates ever faster with every purchase.

Is Jeff Bezos Omniscient?

In life, nothing can grow indefinitely. All businesses follow the bell curve of growth, maturity, decline and death. But is the Amazon model impenetrable? Can Amazon grow forever? Is Jeff Bezos omniscient, possessed of universal or complete knowledge?

Rob Siegel, a lecturer at Stanford’s Graduate School of Business suggests that through technology, Amazon has achieved a unique new formula, never before available in commerce. Intimate household data is the primary factor in Amazon’s success, potentially enabling its immortality. Siegal said, “We’ve never seen anything like this.” The unparalleled insights into what people want, essentially perfecting personalization, paired with a superior logistics and distribution infrastructure, to deliver it more quickly and efficiently than competitors, may indeed make Amazon an indelible model.

Furthermore, they are well into anticipating what consumers need before they even know it. In fact, the patent for “anticipatory package shipping,” was filed in 2012 (a feature that could save 10 percent to 40 percent on logistics costs, say researchers).

So Amazon seems to be the stuff of science fiction, hurtling into a future none of us can foresee, particularly since we are just in the first inning of this Technology Revolution. They got big fast, and are getting bigger faster, adhering to Jeff Bezos’ day-one mandate. It’s a flywheel on steroids.

But don’t get too cocky, Mr. Bezos, the Walmart parachute may be dropping in any minute now.