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Amazon and the Battle of Dien Bien Phu

The contrast between Amazon and an historic Vietnam battle illustrate just how difficult it is to avoid repeating the mistakes of the past.

I know what many of you are probably thinking already.  Those of you that do not know me, are probably going, “Huh?”  And, those of you that know me well are probably saying to yourselves, “Has he gone off his rocker?” or “I know it is his first blog post, but what in holy hell does that title mean?  Call his friends and family.  It may be time for a sit-down intervention.”

If you, the reader (hi mom), will indulge me, I promise everything will make sense soon. When I started this blog, my aims were two fold: 1) I wanted to talk about what I know — retail, and specifically omnichannel retail, while even sprinkling in a little bit of my experience as a father and a husband (note: I said husband and not husbandry.  I don’t know word one (literary pun) about the care, cultivation, and breeding of crops and animals).  2) I wanted to have a little fun while doing it.

So I figured, for my first blog attempt, what would be better than to go back to a place and a time that is generally regarded as the best, most fun years of one’s life — college. The title of this post was inspired by a college history course I took senior year for my major.  I don’t remember the name of the course, but it was something like “Assumption Testing within Historical Analysis.”  There is likely no way that was the real title of course, but I figured the more highfalutin I could make it sound for a Stanford course, the more you would respect me.

I don’t remember much about the course either, except for it being taught by Professor Stephen Haber.  Professor Haber was hilarious and brilliant, probably in that order. Each week he would assign us a different historical text to read, and our job was to dissect the quality of the logic chain upon which the thesis of the text was based (excited to keep reading yet?).  One week, for example, I vividly recall discussing Growth Against Development: The Economic Impact of Railroads in Porfirian Mexico by John Henry Coatsworth.   I don’t know how he did it, but Professor Haber made discussing, for the nine or so of us ready to graduate seniors, the economic and social good of railroad development within early 20th century Mexico incredibly interesting.  I remember him writing the entire logic chain of Coatsworth’s argument on the blackboard, and, to us impressionable 22-year old’s, absolutely shredding it to pieces.

Later in the semester, our attentions turned to a different work . . . wait for it . . .  Hell in a Very Small Place: The Siege of Dien Bien Phu by Bernard Fall.   It was Professor Haber’s favorite historical work.   For those of you that are not current on your 1950’s Vietnam history, Dien Bien Phu was the battle that terminated French involvement in Indochina. According to Wikipedia and to reviews on Amazon (the irony of which will not be lost in a moment), Dien Bien Phu was the “climactic confrontation” of the First Indochina War between France and communist revolutionaries in Vietnam.  French General Henri Navarre assumed command in Vietnam in 1953 and devised a plan to lure Viet Minh forces into Dien Bien Phu, where he believed French air superiority would ensure a victory.  After 57 days of fighting, Dien Bien Phu fell on May 7, 1954.  Neither Navarre nor the overconfident French leadership was prepared for the “guerrilla” lengths the communist forces were willing to go for victory — digging tunnels through mountains, crawling through jungles, calling for volunteers upon volunteers as reinforcements, etc.

Published in 1966 (!), Fall’s thesis was simple.  Professor Haber loved it.  It was structurally sound.  The United States, or anyone else for that matter, had no chance of winning a war in Vietnam.   Unless the U.S. was willing to learn the lessons the French learned — i.e. “not to underestimate the guerrilla or overestimate U.S. air power, and above all to secure the support of domestic public opinion” — the U.S. didn’t stand a chance.  Essentially, in Fall’s mind, a battle 20 years before the evacuation of Saigon in 1975 was the writing on the wall.

The same thing is happening in retail today.   The last 20 years of e-commerce, namely Amazon, are metaphorically the same as Dien Bien Phu.  Go back in time.  Who took Amazon seriously?  Amazon was growing their e-commerce business while providing the e-commerce platform and cloud hosting services for other retailers.  Amazon was building a better mousetrap, while overconfidence and hubris got the better of the retail industry.  Retailers believed and continue to believe that physical stores are the equivalent of air superiority in Dien Bien Phu.  Physical stores are valuable, but in no way are they, in their current form and operation, enough.  Just ask Scott Galloway, Professor at the NYU Stern School of Business.  As Galloway is fond of saying, stand in the center of almost every retailer today, close your eyes, spin around, pretend you are back in 1985, open your eyes, and ask yourself what has changed?  Sadly, not much for almost all retailers.  The retail experience from 1985 is nearly the same as it is today in 2017, and the playbook most retailers are running is still Student Body Left as well.

Just as the Viet Minh did in Dien Bien Phu, and this point is often glossed over, Amazon accomplished all of it successes while quietly securing public favor too.  Amazon built a company that was customer first.  Everything Amazon has done and continues to do — from the reinvestment of their profits to their focus on “guest love” vs. “cost problems” — puts the customer at the center of everything, and so we at home, on their website, speaking to Alexa, are continually immersed in a frictionless experience that we cannot live without.  Amazon wants to buy Whole Foods?   Oh, yes, please!  My life will be so much better!   If Walmart were to do it, we would all be crying foul.

And, if I still haven’t convinced you yet of my analogy, let me leave you with one final example.   The other day I needed batteries.  So I decided to conduct a little test.  I went to a major retailer.   I parked my car, took my 4-year old and 2-year old out of their car seats, found a pack of AA’s, and then proceeded to wait in line to pay.  I waited in line 12 minutes.  12 minutes.  12 minutes just to pay, not even accounting for the 10 minute commute time back and forth to my house, the time to find batteries in the store, plus the lovely torn anterior cruciate ligament I suffer nearly every time I take my kids in and out of their car seats.

I then pulled up my Amazon app.  5 seconds to find the batteries I wanted.  10 minutes for Amazon to pick and pack them for shipment to my house next day.  Just 10 minutes.

Translation:  Amazon can pick and pack product faster than I can checkout in a store.

The tunnels have been dug, the artillery has been dragged into position through hell and back, and the ground forces (cough . . . Alexa) continue to swell.

At least, the coal industry is on the up and up.  We got that going for us.

Oh, and let’s not forget robots too.

Be careful out there,

Chris

P.S. If you enjoyed the above, please share the post with your friends and colleagues.  I would love to hear your feedback as well.   Please also stay tuned for additional content in the future.

Coming soon, riveting posts entitled . . .

  • Are Retail CEOs Destined to Become Murray Hamilton?
  • 10 Signs from an Earnings Call that a Retailer is in Trouble
  • Retail’s Product Problem — Why We Need to Stop Thinking with our Small p’s
  • Reverse Engineering and 10,000 Leagues Under the Omnichannel Sea
  • Moore’s Law and a Discussion of the Log-Linear Relationship Between Device Complexity and Retail

. . . let me know what you would like to read first.

P.P.S.  Who the heck is Murray Hamilton?

Chris Walton View All

Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.

Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.

Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.

He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."

23 thoughts on “Amazon and the Battle of Dien Bien Phu Leave a comment

  1. Congrats on the new blog! I vote for “retail’s product problem – why we need to stop thinking with our small p’s” – not only do I enjoy the title, a lot, I’m very interested in your diagnosis of the problem!

    • Hi Shari! That is my personal favorite title too! Not sure where I will go next. That one will definitely be soon. Maybe I will try and keep you hooked with anticipation 😀

  2. Intriguing stuff buddy! Eager to read more of your thoughts. So true about how different the reaction would be if WMT bought Whole Foods.

  3. Great Article. It truly is the sign of the times. I guess we all need to start thinking about retail differently. It will be nice to know, where this is going with retail and be able to get a jump start, with your information. Keep us posted. Thank you.

  4. For someone that is a fan of history and has a short attention span, that was a great read! I vote for whatever you want to write next….Nicely done

  5. Enjoyed the read, took me back to Friday mornings. 🙂

    Got 3 things for ya:
    1 – Bezos’ Empire in One Giant Chart
    http://www.visualcapitalist.com/jeff-bezos-built-amazon-empire/
    2 – How Bezos Built his Amazon Empire
    http://www.visualcapitalist.com/jeff-bezos-built-amazon-empire/
    3 – On what the U.S. should’ve learned from the French, I give you the CEO of Blockbuster in 2008, speaking on Netflix, “”Neither RedBox nor Netflix are even on the radar screen in terms of competition,” he said. “It’s more Wal-Mart and Apple.”

    P.S. My Vote – Signs from an Earnings Call that a Retailer is in Trouble
    P.P.S. 3 Mins + Google = finally getting your Murray Hamilton reference.

    • You rock man! That bezos stuff is great. The flywheel is always awesome. And my favorite is how prime was an intuitive hunch. That is great! Looking like Murray may be next – stay tuned and let’s grab lunch soon!

  6. Thoughtfully written. Out of a combination of curiosity and boredom, I did my own experiment. The results – 8 minutes to get to a local store, 3 minutes to walk in and find that the item I wanted was out of stock (benefits of not having to remove small humans from car seats), 8 minutes to return home empty handed. 19 minutes vs. 38 seconds to find and order the item on Amazon and 12 minutes to receive a shipment notification. I look forward to reading 10 Signs from an Earnings Call that a Retailer is in Trouble and Retail’s Product Problem — Why We Need to Stop Thinking with our Small p’s.

  7. Thoughtfully written. Out of a combination of curiosity and boredom, I did my own experiment today. It took 8 minutes to get to a local store, 3 minutes (the perks of not having to remove children from carseats) to go inside and find the item I wanted was out of stock, and 8 minutes to return home vs. ordering the item on Amazon took 38 seconds and 12 minutes later I received a shipment notification. 19 min. to be empty handed vs.12 min and 38 seconds… I look forward to future posts!

  8. Loving it, Chris. Keep rolling. I vote for whatever you’re willing to share, but I’m excited for your take on the earnings call.
    Specifically regarding batteries, though, there isn’t a more interesting (?!?) everyday item to understand what amazon has done and I have my own personal experience from last weekend. I needed AAA batteries for some kid toy. I didn’t even consider for a moment venturing out of the house with a 2, 4, 6 year old and a 39 week pregnant wife all requiring various levels of attention from me. So I told my Echo – order Amazon Basics AAA batteries. 5 seconds total investment, max. 40 hours later, I had them. Or did I? I got AA’s instead in the box. Did Amazon mispick? Nope. Their PDP includes various battery types and pack sizes of which AA 36 count is the default, so the voice technology placed an order based on the default item on the PDP despite telling me it ordered AAAs. Voice tech coupled with site taxonomy and PDP was the culprit. Time for a return. Man, I hate ecommerce returns. But… I didn’t need to send them back says Amazon. “Our mistake” says the website. Of course, it’s a high margin item where they’ve developed an owned brand and improved my life by getting rid of the cardboard cutout thing and theft-reducing clamshell packaging and reduced their expenses by moving to a one color box. And now I have 36 AA batteries in addition to 20 AAAs to build more product loyalty while feeling oddly good that they took care of me. The flywheel even works when they screw up. Retailers, study up.

    • Wonderful Nate. Totally exemplary of how things will go even further. Item data is the new center of the retail flywheel. Starting to ruminate on the earnings call now. More to come soon!

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