Amazon, Trading Joe's, WSJ -- April 12, 2024

Locator: 46988AMAZON.

I really don't care one way or the other but I find this story just incredibly amazing and it's on the front page of The WSJ. 

Link here.

From the linked article:

When Amazon was working on a new private-label food brand called Wickedly Prime, members of the team pitched management this vision for the brand: to replicate the top 200 items sold at Trader Joe’s, the grocery-store chain with a rabid fan following.

To help in its quest, the team recruited a senior manager from Trader Joe’s snack-foods business. The recruit wasn’t told specifically what she’d be working on when Amazon conducted her interview in 2015.

But during her first week she walked into a conference room at headquarters with brown paper covering the windows and door to ensure privacy, and she started piecing things together. The mysterious conference room was filled with boxes of Trader Joe’s snack foods piled high on shelves, which Amazon had bought up to study for its own brand. This alarmed the employee, who was eventually told she was hired to help create the product assortment for Wickedly Prime.

The problem was that Trader Joe’s secrets were well guarded. The grocer doesn’t offer online shopping, so there is less known about the company’s top sellers than about products sold by retailers that sell online, which have customer reviews. Much of what Trader Joe’s sells, it makes itself—interesting concoctions that fly off shelves, like cinnamon bun spread and rosemary croissant croutons. Amazon wasn’t sure exactly which 200 items to copy, but a manager on the team was determined that their new employee would help them figure that out.

A part of Amazon’s success is a cutthroat culture where employees are incentivized to win to an unusual degree. Amazon uses stack ranking, grading employees against each other and cutting the bottom 6% of performers each year. New employees get the majority of their restricted stock units paid in their third and fourth year at the company, which can mean they never receive them, since there is notoriously high employee turnover at Amazon.

An environment where every year employees are cut from an already all-star pool of talent at a company with unprecedented access to data meant that accessing data to gain an edge—as well as using other tactics to hurt competition—was a powerful way to stay ahead and make it to their restricted stock units.

This reporting draws on hundreds of pages of internal documents and emails, and interviews with more than 600 employees, partners, competitors and regulators. They show that Amazon often had its thumb on the scale, creating scenarios to give itself a leg up or create hit products at the expense of rivals.

Amazon’s spokesman said Amazon has innovated for customers, spurred lower prices, enabled millions of successful small businesses, and significantly increased competition in retail. Its “culture centers on innovating for customers to make their lives better and easier,” he said. It doesn’t do stack ranking, he said, but admitted that Amazon currently has a percentage goal for what Amazon calls unregretted attrition in place.

And so much more at the link.