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Amazon's Glass Is Definitely Half-Full (or More)

By Jon Friedman - Apr 15, 2013 at 8:00PM

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Amazon's intense focus on customers position it well for the long term.

Is Amazon.com's (AMZN 3.66%) corporate glass half-full or half-empty? I take the positive side of the debate.

Amazon chief Jeff Bezos recently sought to reassure his shareholders that all is well. In a recent letter to stockholders, he stressed, "As I write this, our recent stock performance has been positive but we constantly remind ourselves of an important point -- as I frequently quote famed investor Benjamin Graham in our employee all-hands meetings: 'In the short run, the market is a voting machine but in the long run, it is a weighing machine.'"

That's no doubt uplifting but the thing is, skeptics might just be weighing Amazon's long-term prospects ever since they came across the findings of an intriguing Forrester research report. 

Forrester polled 4,500 adult U.S. online and discovered that in all prominent consumer classifications -- except for travel -- shoppers said that visiting a store counted as the most critical piece of research before making a purchase.

Hmmm. What do those data portend for Amazon -- and have we amateur sociologists actually been wrong all these years about what drives the passion of the American consumer? 

According to conventional wisdom, we have. To be sure, the U.S. Census Bureau statistics note that e-commerce buys represent a scant 5% of the nation's total retail sales. 

Don't panic, Amazon shareholders! It should be noted as well that -- and can't you see the sunny Mr. Bezos beaming as he reads these data? -- this percentage has jumped more than three times the level of the dawn of the 21st century and it looks like consumers continue to warm to electronic commerce purchases as they become more familiar with the practice.

The half-full/empty conundrum can seem to be everywhere when the discussion centers on Amazon's performance and prospects. If you're a stockholder, you already know this by heart, right?

Remember, Amazon's stock price is up about 9% year to date while the benchmark S&P 500 index has jumped 11%. Year over year, Amazon has added 45% compared with the S&P's figure of 15%.

For his part, Bezos doesn't let his judgment get clouded by fits and starts in the stock market, which is actually good news for his stockholders. He displays an interest in managing beyond the three-month quarterly earnings cycle, and this, too, should mightily reassure Amazon holders. Chasing short-term stock market gains is a sucker's game, whether you're an individual trader or the head of Amazon.

"We don't celebrate a 10% increase in the stock price like we celebrate excellent customer experience," Bezos wrote to his shareholders. "We aren't 10% smarter when that happens and conversely aren't 10% dumber when the stock goes the other way. We want to be weighed, and we're always working to build a heavier company."

Bezos has his priorities straight. For this reason alone, Amazon stockholders should probably feel optimistic about the future of the company and the prospects for their shareholder interests. I agree with Bezos that a pedigree of satisfied Amazon customers matters much more in the long run than a fleeting gain in the stock price -- or a sudden drop.

Amazon can control its customer service performance while its stock market results sometimes seem to be at the mercy of the whims of quixotic stock market analysts, moody Wall Street stock pickers, and frenetic day traders and short sellers. 

Speaking of stellar customer service, I recently purchased a DVD on Amazon for about $21.99. To be exact, it was a MusiCares concert tribute to the songwriting and music of Neil Young. The package arrived at my door when Amazon said it would. It was not damaged or nicked up in any way, either. 

I had an ideal customer service experience with Amazon. I will certainly be using Amazon again to make a purchase. Someone, please tell Forrester. 

Somewhere, Jeff Bezos is smiling. Ka-ching.

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