Amazon’s new boss Andy Jassy – the man filling the biggest shoes in retail

Jeff Bezos, the world’s second-richest man worth over $190bn, needs little introduction, having spearheaded Amazon’s meteoric rise from an online bookstore in 1994 to a truly giant conglomerate spanning entertainment, ecommerce, communications, cloud computing and bricks-and-mortar retail. 

His handpicked successor, Andy Jassy, on the other hand, does need some introduction, despite having been at Amazon, as Bezos put it in a letter to employees, “almost as long as I have”.

Amazon’s founder is not fading into retirement yet and will remain with the business as its executive chair. Nevertheless, he is clear on the scale of the challenge his lesser-known successor will be stepping into.

On the job he is vacating, Bezos says: “Millions of customers depend on us for our services, and more than a million employees depend on us for their livelihoods. Being the CEO of Amazon is a deep responsibility and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else.”

What then will Jassy bring to one of the most high-profile jobs in world retail and what challenges will he face in trying to continue its exponential growth? 

An Amazonian with edge

Amazon’s new chief executive has been with the company for 23 years, having joined the then fledgeling start-up straight from Harvard Business School in 1997. 

Described by GlobalData managing director Neil Saunders as “a true Amazonian”, Jassy is currently chief executive of Amazon Web Services (AWS), the cloud computing arm, in a role he has held since its inception in 2003.

Although he is clearly a company man, Jassy subverts the heavily media-trained corporate executive often associated with Amazon.

On his Twitter profile, Jassy describes himself as a “big sports, music and film fan” and an “experienced buffalo wings eater”. So sports-mad is Jassy that he reportedly built a sports bar in his basement called HelmetHeads and he is the part-owner of his local Seattle ice hockey team. 

“The retail business is the public face of Amazon. But it’s not the moneymaker – AWS is”

John Reily, former Amazon head of user experience and ecommerce design

His wife Elana previously donated money to Bernie Sanders’ 2016 presidential campaign, whose platform included taking action against companies like Amazon – though all of Jassy’s donations through the years have been made to Amazon’s corporate political action committee, which donates to both parties.

Jassy is also clearly a man not afraid to ruffle a few feathers internally. Bezos’ ‘two pizza rule’, designed to limit the size of meetings at Amazon, is famous but Jassy’s technique for ensuring maximum productivity in meetings is also legendary. 

Former employees speak reverently of ‘The Chop’, shorthand for meetings where Jassy holds his most important brainstorming and planning sessions.

“If you go to a Chop meeting with Andy, you better be ready,” one former senior-level employee told Insider. “He has a tremendous amount of trust in his team, but you have to be at the highest levels of diligence and preparation for any meeting with him. He’s a shark who will smell a drop of blood from 100 miles away if you’re not ready.”

Aiming for the cloud

Dentsu Commerce president and former Amazon head of user experience and ecommerce design Jon Reily says Jassy was not always a shoo-in to take the reins as CEO and only became frontrunner after Bezos’ long-term choice for successor, Jeff Wilke, announced he would be stepping down as Amazon’s retail boss last year. 

But to write him off as second choice would be to underestimate the importance of AWS to Amazon’s growth in recent years.

“Jeff has clearly been thinking about this for some time and Wilke was the original choice because he ran the retail business, which is the public face of Amazon. But it’s not the moneymaker – AWS is. So this is an acknowledgement to me of the importance of subscription over the long term for Amazon,” says Reily.

In terms of immediate priorities, Jassy’s background at AWS indicates this is where Bezos sees Amazon’s major engine of growth coming from.

While the pandemic has helped speed up growth in the majority of Amazon’s divisions, it has seen the growth of AWS accelerate exponentially. It is now the most profitable part of Amazon, as shown by its third-quarter results.

In the period, AWS generated $12.67bn in sales with an operating income of $3.6bn. It generated 12% of Amazon’s operating revenue for the period but 60% of its operating profits. 

This explosion in growth has been driven by AWS’ customer base, which includes Netflix, Zoom and medical therapeutics firm Moderna, which used AWS technology to help create its Covid-19 vaccine. 

As Jassy told CNN in December: “Virtually every vertical business segment is being reinvented as we speak in significant part because of the cloud.”

For retail author and consultant Miya Knights, Jassy’s appointment highlights the importance Amazon is placing on keeping ahead of its competitors in this space. 

“AWS is not just the most profitable business for Amazon, it’s also the most important. Without AWS, none of the other businesses would exist. AWS provides the rails on which all of not just Amazon’s other businesses, but many others around the world, runs on,” she says.

“So one of Jassy’s first goals will be to not just guard the 30% market share in cloud computing AWS currently holds, but expanding that against the competition.”

Firing up food

While Jassy is steeped in both Amazon’s overall business culture and the AWS model he has done most to grow, it will no longer be his sole focus. 

For all of its etail dominance, Amazon’s retail profitability has been comparatively sluggish due to the huge costs of investing in its distribution centres, employing staff, investing in fulfilment infrastructure and remaining competitive on pricing. 

Another key area for Jassy will be pushing on with Amazon’s international growth strategy. As Retail Week head of insight Lisa Byfield-Green explains: “Amazon has always talked about a long-term growth strategy of international being at least as big as a US sales, if not bigger.

“But at the moment, the US accounts for 61% of sales while international is 27%. Amazon has big opportunities in places like India, and even in the European market, but it’s going to be a challenge for him”.

As Reily notes: “Amazon currently only interacts with one in eight humans on the planet. I know that Jeff wants to be like Facebook, reaching one in four”. 

Another area of focus will likely be on food – both through its own multichannel arm and through Whole Foods Market. 

While Amazon has made a lot of noise around its Amazon Go grocery stores in the US and its online capabilities, analysts in the States note that major competitors like Walmart and Kroger continue to comfortably outperform it.

Knights also believes its $13.7bn acquisition of Whole Foods in 2017 has been “a bit of a failure”. 

Reilly agrees, adding: “Covid-19 has shown that now is the time for Amazon to push in the grocery market given all the changes in behaviour and habits we’ve seen in the consumer.”

Casting a long shadow

While he will untangle himself from the day-to-day running of his sprawling empire, Bezos will hardly be shuffling quietly into retirement. On his new executive chair role, Bezos says: “I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post and my other passions.”

Reily believes Bezos will both literally and figuratively “helicopter in for projects that are interesting to him”, but says he has got the core customer ecosystems that power Amazon, like Prime, “in place”.

“All of Amazon’s businesses, while very disparate, all have a common theme of getting you into an ecosystem and keeping you there. All of its businesses are repeatable programs that keep money coming into its coffers, and day-to-day those are already in place,” he adds.

However, Reily does not think Jassy will simply be a puppet with Bezos pulling the strings: “Amazon has moved into every facet of our lives really and I know it wants to expand on that. So, if that’s the long term vision of the company, then the guy who runs the most successful facet of that vision is probably a good choice to run the company overall”.

“Bezos is a political animal with political appetites. This will allow him to be able to rub shoulders with politicians and influence their decisions”

Miya Knights

Saunders agrees, adding “operationally Amazon will continue to thrive and Bezos will have more time to innovate and move the company forward”.

Beyond Jassy’s control, Amazon is facing external crises that could prove more existentially damaging. It is, alongside other big tech firms, facing the prospect of being broken up by antitrust probes in the US and the EU.

Big tech companies are also lobbying against digital taxes at home and abroad.

For Knights, the timing of Bezos’ decision may be linked to him thinking he can better use his wealth, power and influence on Capitol Hill as an executive chair, rather than as chief executive. 

“He’s a political animal with political appetites. This will allow him to be able to rub shoulders with politicians and influence their decisions over these potentially enormous policy changes,” she says.

While Amazon’s longer-term problems may be decided by politicians, not consumers, Jassy is still taking over the levers of the pacesetter and gamechanger for retail and many industries besides.

His performance in his new post will not just be watched closely by his predecessor but by the entire world.