The balance of good vs. evil – why Amazon proves consumers are choosing easy over ethical
Originally written for Marketing Week
How much is too much?
A pint of Speedway Stout sold by The Craft Beer Co. in London costs £22.50 – that’s too much.
Teenagers wearing Jimmy Choo Diamond trail stretch mesh trainers, retailing at a smidge under six hundred quid? That’s too much.
Potty-mouthed Chef Gordon Ramsay booking generic ballad machine Ed Sheeran for his daughter’s 18th for half a million quid? That’s too much.
But the king of profligate wastage must be HMRC who only billed multimedia retailing behemoth Amazon £220 million in taxes on UK revenues of £10.9 billion in 2018 – a highly attractive rate of just over two percent. Too much of a good deal, surely?
Amazon is a marketing wunderkind. From humble origins as an online bookseller in 1994 to the global retail, media and data empire it’s become today, most households in the UK are at least occasional customers. Many are superusers.
What’s not to love?
Need a job lot of new nappies? Sure – here’s the cheapest price available and you can have it delivered to your door this afternoon. Plus, if you sign up to Prime you’ll not only get free delivery, we’ll chuck in a bunch of TV shows and movies to boot.
This alone would have laid the foundations for a significant empire, but Amazon is a world leader in the more nefarious world of big data, too. Whilst Google might just collect, analyse and sell on information about your behaviours, Amazon not only owns the advertising channels and retail shopfronts (both digital and real world – they bought Whole Foods in 2017) but all elements of the distribution pipeline in between. They effectively know what you’re going to buy before you do and manipulate manufacturing, availability, logistics and pricing accordingly.
Amazon is omnipotent.
In 2014 they made their most balls-to-the-floor move yet. If anyone had suggested before then that consumers would allow an advertiser to listen in on their private conversations in order to sell to them more effectively, there would’ve been universal outrage.
But founder Jeff Bezos doesn’t hire stupid people.
In a Trojan Horse move of such astounding arrogance it’s barely believable, they sold Alexa as a ‘digital home assistant’, making it seem like a beneficial lifestyle tool, rather than a bugging device. Such brazen chutzpah takes significant balls, but with annual revenues in the hundreds of billions they can certainly afford Y-Fronts big enough to cradle them.
The company employs just over 27,500 people in the UK (each of whom, one assumes, is paying more traditional amounts in income tax) and as such, employer taxes made up the highest proportion of Amazon’s bill, closely followed by business rates and corporation tax.
When there’s so much cash at stake, you’re able to employ the best of the best in the tax advisory world. Finance for the business is therefore redirected via Amazon EU in Luxembourg, meaning revenues from its retail, warehouse and logistics arms are buried well away from the eyes of the general public. If they were an individual employee, it’s safe to say they’d spend from here to eternity being audited but as the third biggest company in the world after Microsoft and Apple, their clandestine dealings are, oddly, legal.
And it gets worse.
In the USA, Amazon hasn’t paid a penny in tax for the past two years – despite revenues of $232 Billion and profits of $11.2 Billion. This forgiving regime was implemented by President Trump’s Republican Party (although it was partially embedded prior to his inauguration) which was rather hoodwinked when it gave the company a $3 Billion tax rebate after they promised to build a second headquarters in Queens, NY (filled with tax paying, no-longer-jobless, election-voting employees, one assumes). Amazon took the rebate and promptly reneged on the deal.
So, they’re conniving bastards, sure enough, but they’re certainly not criminals – just a very successful service provider offering terrific value to time-poor households. Which brings us back to the Amazon’s consumers, who are ultimately (and, apparently, happily) paying for this absurd level of profiteering. In an era of supposedly woke consumerism in which corporate social responsibility, purpose and brand activism are apparently high on a shopper’s agenda, the majority of us are gleefully (if covertly) one-clicking our casual shopping via Amazon, accepting unnecessarily over-boxed packaging every week, if not every day.
If there were any rainforest left in the actual Amazon, it would be weeping.
This insane and frankly dangerous obsession with immediacy in our current ‘Now culture’ and addiction to rafts of unnecessary consumer goods puts the environment firmly below retail therapy, price and convenience in our collective priority lists.
So called ‘meaningful marketing’ – in which brands adopt a stance on a popular social issues - was meant to be on-trend but really, does the majority truly care? Or do they just want to be seen to be caring? Hashtag Activism is certainly thriving…
In July of this year Amazon was valued at £730 Billion, of which Bezos is a 16% shareholder. Thanks to Digital Dumping, the majority of its retail operations are in fact losing money, designed more to build brand advocacy and collect data, with 75% of Amazon’s profit coming from cloud services. He’s comfortably the richest person in the world and even after a £28.8 Billion divorce bill last summer he was still worth £113 Billion. Yet Jeff hasn’t followed the lead set by other Billionaires Bill Gates and Warren Buffett in committing the bulk of his riches to a higher philanthropic purpose.
As the 25th biggest landowner in the States, he could positively offset his company’s epoch-defining carbon emissions by planting a few trees at least, following the recent lead set by YouTubers Mr. Beast and Mark Rober in their support for The Arbor Day Foundation. The Foundation is on a mission to get 100 million CO2-guzzling trees in the ground by 2020 at a Dollar a sapling.
Mr. Bezos’s US tax rebate last year alone would plant 3 Billion new trees, enough to repopulate the entire rainforest after which his company is named, and yet he seemingly remains on a single-minded track to self-fulfilment.
If he doesn’t have a vault in one of his castles full of gold coins to dive into, I’d be sorely disappointed.
As Christmas approaches and panic shopping sets in, the streets will be paved by the detritus of Christmas future – millions of dampened Amazon boxes, their logo’s ironic smirk grinning up from pavements around the world like a portentous Cheshire cat.
The only people that can curb Amazon’s climb to global dominance (with associated negative impact on the planet) and put the environment back at the top of the public’s agenda are the shoppers, who currently - behind closed doors, at least - don’t seem to give a damn.
Harry is the founder of Brand Architects.
You can contact him at Harry@BrandArchitects.co.uk or via LinkedIn & Twitter @MrHarryLang.