Legendary and visionary retailer Sam Walton not only had a private airplane in the early days of Walmart, he also piloted it to Walmart stores throughout the south. On those trips, Walton routinely walked the aisles of competitor stores with an eye on acquiring knowledge that would improve his own.
In his forthcoming memoir, The Whole Story, Whole Foods founder John Mackey writes that he did as Walton did, but with Southwest Airlines as his mode of transportation. Not infrequently, he would leave Austin for weeks at a time to visit other health-food stores around the U.S., including Mrs. Gooch’s in California, Bread & Circus in Massachusetts, Wild Oats in Boulder, and on and on.
To be clear about what Walton and Mackey did, it’s as old as business to follow competitors as closely as possible. And in all aspects of business. They don’t call the National Football League a copycat league for nothing. Everyone’s watching what others do, and frequently hiring away executives, assistants and head coaches from other teams as a way of acquiring presumed expertise.
Does it always work? Surely not. See the proverbial “coaching trees” of individuals like Bill Belichick and Nick Saban if you’re curious. Not only is expertise difficult to transfer, there’s a Sid Gillman truism to football that applies to every business: if you see an open receiver, you’re already too late. Gillman’s point was that in football, as opposed to waiting for the man to get open, you must anticipate. Same with business. The present is the past.
Home Depot co-founder Arthur Blank put it very well. He and co-founder Bernie Marcus similarly walked the aisles of competitor stores for ideas, they acquired competitor expertise too, but they also knew the present was invariably the past. As Blank once put it, “No matter your business, you cannot stay still for any length of time or your competitors will scratch and claw all over you.”
Why all this throat-clearing ahead of a piece about Amazon? It’s hopefully useful as a corrective to all the feigned or naively expressed horror from media members about Amazon’s efforts to – gasp – follow and learn from the actions of its competitors. Media types have tried to make news about what, in a business sense, is the sun equivalent of that rather prominent star setting in the west. There is business and competition among businesses, and where there’s both they're watching each other, visiting each other’s stores, hiring each other’s most talented (or not) employees, and frequently acquiring competitor businesses altogether. As readers will gather from Mackey’s aforementioned memoirs, he did all four in building Whole Foods into a multi-national supermarket chain, one acquired by Amazon in 2017.
This is something to think about as media members yet again pretend that Amazon’s hiring of a Trader Joe’s employee with an eye on acquiring competitor expertise is somehow a story. It’s not. It’s what competitors do. Better yet, they wouldn’t be competitors and they certainly wouldn’t be effective marketplace competitors absent relentless efforts to observe the competition up close in an effort to improve themselves.
That Amazon hired away a Trader Joe’s employee as a way of enhancing Wicked Prime is hardly a story either. In truth, it just speaks well of Amazon. Rather than acquiring market knowledge essentially for free, Amazon bid a prominent Trader Joe’s employee away, thus reducing Trader Joe’s labor costs in the process of adding the grocer’s expertise.
Did it work, or will it work? It’s impossible to know, which is a statement of the obvious. As we see in all aspects of business, acquiring market information or talent or a business altogether doesn’t ensure future success. That is so because acquiring talent, business practices, or actual businesses isn’t the same as effectively executing in the marketplace.
After which, let’s not forget Blank’s crucial point that applies to all aspects of commerce, that the present of commerce is invariably the past, that “you cannot stay still for any length of time or your competitors will scratch and claw all over you.” In watching competitors, hiring away competitor employees in an effort to learn more, or actually buying competitors, acquirers are merely buying the present.
As we see time after time, that’s not enough. And it may not be enough for Amazon. If the Seattle giant is unequal to the future, this will be revealed in the marketplace. For now, how foolhardy for media members to harass Amazon’s present efforts to discover the future.
