Amazon Just Made An Enormous Mistake?
Amazon may have made a huge mistake. The e-commerce titan just appointed a new CEO to its retail division and he may not be up for the job.
Amazon just appointed a new retail CEO to its upper echelon of executives. Doug Herrington has 17 years under his belt with the company and has spearheaded successful projects such as the e-commerce giant’s acquisition of Whole Foods. However, some think the e-commerce behemoth could have made a major mistake by choosing to promote Herrington to this vital leadership role.
Herrington has a reputation at Amazon for thinking out of the box and being exceedingly creative. But he also has a track record of pushing ideas that don’t necessarily pan out. A recent example was the pharmacy initiative that he has been steering at Amazon since 2015. Herrington vied for Amazon’s purchase of the company PillPack, which has since been renamed Amazon Pharmacy. Herrington’s thought was that Amazon could tap into the multi-billion dollar pharmaceutical industry and scoop up some of its highly lucrative market share. Unfortunately, to date, Herrington’s push into the industry has yielded lackluster results. Amazon is still struggling to add subscribers to its Amazon Pharmacy service.
That being said, a guy with big, bold, and creative ideas may just be the thing that Amazon’s retail leadership needs. One of Herrington’s former colleagues pointed out that in contrast to many other Amazon leaders “Doug is strangely collaborative for Amazon. He likes an engaging meeting. He likes to bring people into the conversation,” said the former colleague of Herrington to Business Insider. In business, these are good qualities to have. Some of the most successful leaders have engaged with their employees in similar ways. One that comes to mind is Nintendo’s late president Satoru Iwata. Additionally, some close to Herrington think that his softer and more introspective demeanor will be a nice change of pace from the “ruthless” interactions they’ve had with other top-tier executives.
Moreover, since Herrington largely took point in the Amazon/Whole Foods deal, he could be the one best suited to continue to drive that helm forward. According to data from Numerator, the e-commerce giant’s total grocery market share combined with Whole Foods’ only sits at 2.9%. That is negligible compared to Walmart’s 21.3% market share and Kroger’s 10.2%. Herrington, being that he is so deeply tied to that initiative, could be the perfect individual to further grow Amazon’s presence in the grocery space. In fact, Herrington is somewhat accredited for the reason why people buy essentials such as toothpaste from Amazon. “You can credit him for people buying toothpaste on Amazon,” said a colleague who had witnessed a presentation given by Herrington that solicited his belief that “CRaP products” (can’t realize a profit) were Amazon’s key to future success.
Ultimately, it remains to be seen whether or not Doug Herrington has what it takes to successfully lead Amazon Retail. His initial months in the role will certainly prove to be a test for that. They will also serve as a window into the potential vision and directions he has for the company going forward. Overall, if the e-commerce titan did in fact make a calculable error in promoting Herrington his performance will certainly be an indicator of that. For now, perhaps it’s best to hope that he is the right man for the job, though.
