A petition containing tens of thousands of signatures intended to prevent outgoing Amazon (NASDAQ: AMZN) CEO Jeff Bezos from returning to Earth after his impending space voyage has begun trending online. While comedic, the petition highlights a problem that faces Amazon as it approaches its first significant leadership change; an abysmal public image.
At first glance, the headline doesn't appear to be very "damaging" to Amazon's reputation. If anything, it's a fairly common jab that tends to begin as a small joke on social media before snowballing into trending, nothing at all out of the ordinary. Admittedly, the story itself has very little to write on, but it's the trend that it represents that warrants concern.
Alongside articles mentioning the petition was a seemingly never-ending torrent of articles detailing the struggles of Amazon's workers to make ends meet, accusations of union-busting, sharp criticisms from regulators and experts, and vitriolic social media posts cursing the company. Aside from mentions of product launches and other standard announcements, much of what is said of Amazon is negative, and that negative trend is growing.
It would be challenging to argue that Amazon isn't at least somewhat aware of its atrocious reputation, which makes the reality of its situation that much more dismal, as the company doesn't appear to be doing anything about it.
Amazon's sales are still robust, of course. I would also be confident in writing that Amazon is probably the last company to be in any danger of going bankrupt within the next decade. I don't see Amazon's negative reputation suddenly causing it to stop making sales in some Hollywood-esq fashion. The genuine threat to Amazon lies in the longer-term ramifications of its deteriorating reputation, such as a gradual decline in users as consumers look for alternative ecommerce storefronts--a trend that has been growing far more popular amid the coronavirus pandemic.
The profoundly negative reputation may also lead to increased traffic to Amazon's major competition over time, especially as the company's initial advantages are chipped away by competitors such as Target (NYSE: TGT) and Walmart (NYSE: WMT), which have rapidly gained ground amid the pandemic. Additionally, little public faith in the firm leaves little defenders against the ever-present eye of regulators. Given the increased antitrust activity in Europe, China, Australia, and elsewhere, Amazon faces far more regulatory pressure now than it has in previous years.
In all, Amazon's negative reputation poses a long-term liability to investors. The firm's questionable practices and lack of adequately addressing the torrent of negative press pose many threats beyond those I've listed here. Amazon's upcoming leadership transition may be the fresh start the company needs to address its declining reputation finally. However, this will rely entirely on how much effort the firm is willing to put in past this point.