For One Or For All

The evolution of consumer choice and the unbundling of e-commerce

- Shubhranshu Singh

At a recent interview at the Economic Club of Washington DC, Jeff Bezos, now the world’s richest man owning 16% of the trillion-dollar valued Amazon, was asked by American financier and philanthropist David Rubenstein where he got the idea of selling books online. The answer Bezos gave was that he saw in the early 1990s that the Internet allowed universal access to books, a category where choice was cramped by physical availability because there were two million+ books in print circulation at a given time, whereas only at the biggest physical store possible, you couldn’t have more than say 1,00,000 to 1,30,000 titles. He then took Amazon into music, videos, electronics, toys, etc., based on this underlying logic.

This set me thinking. Amazon has beaten most of its competition with a simple philosophy, namely, endless choice at lower prices. However, this middle land of branded choices and an economic rationale driving buyer behaviour may be outliving its compelling lifetime of share gain.