Nimble Amazon Thrives In Recession

Jeff Bezos may not have realized how prophetic the name Amazon would be. Having conquered the online book market, reports the New York Times, "Amazon is set to cross a significant threshold" to become the Wal-Mart of the web. By the end of 2009, Amazon's worldwide sales of general merchandise will exceed the books, music and movies Amazon is known for.

“Amazon’s expansion strategy has allowed it, almost alone among retailers, to thrive during the recession, even while its own media business has stagnated,” says The Times. In July, Amazon acquired rising shoe retailer Zappos.com, and will soon expand its private label business into cables and media discs.

While Amazon's marketing has helped transition customers into seeing it as more than a bookstore, back-end innovation is the real engine of the company’s successful expansion. In Amazon’s huge merchandise warehouses, "every product, shelving unit, forklift, roller cart and employee badge… has a bar code." Analyst Jeffrey Lindsay credits the company's "almost magical business model in terms of inventory management"

The technology sector fared well in Interbrand’s Best Global Brands 2009, despite the recession. The report ranks Amazon number 43, up 22 percent from last year. Companies like Amazon, Google, and eBay dominate this year's BGB, with 20 of the top 50 brands coming from tech.

Amazon builds engagement with purchase recommendations, wish lists, customer reviews and free shipping, and has done better than some expected in rolling out the Kindle book-reading device. But according to Interbrand, the company's success shows "why you are best off not owning a retail footprint in a recession": its flexibility lifted it past struggling and fallen competitors like Borders and Circuit City.