COMMENTARY--If Amazon.com wants to be treated as a serious retailer, it should report results like one.
Wall Street these days is fond of proclaiming that online stores are really just another facet of retailing, offering little more than catalog sales with an electronic front. But e-tailers aren't as open with their sales figures.
Even before the dot-com crash, the most frequent comparison cited for Amazon.com (Nasdaq: AMZN) wasn't an Internet firm, but the bluest of blue-chip retailers, Wal-Mart Stores (NYSE: WMT).
Amazon.com remains the poster child for consumer commerce on the Web. The company's recent embrace of deadlines for profitability represents, for many people, the maturation of the Internet.
Now it's time for monthly reports.
People who follow the retail scene wait each month for big chains to release sales figures. Most publicly traded retailers over the past couple of decades started monthly sales reports because of pressure from investors, says Michael P. Niemira, vice president with Bank of Tokyo-Mitsubishi, which compiles the data for its Retail Chain Store Index. Wal-Mart has been doing weekly and monthly reports since 1994, according to a Wal-Mart spokesman.
Wall Street scrutinizes "same store" or "comp store" figures, that is, sales from stores open at least a year. Anyone can boost revenue by opening new stores or lines of business, but the true metric of a company's strength is its ability to increase revenue from established venues.
Amazon.com doesn't operate stores, but that's not the point. The importance of monthly sales reports isn't tied to physical locations. That's why J.C. Penney (NYSE: JCP) includes data from its catalog business.
Except for enterprise software publishers--which pack most of their sales into the last few weeks of a quarter--all publicly traded companies ought to provide monthly updates. Modern database technology makes it easy, and shareholders deserve all the data they can get.
"I think it's about being consistent and willing to tell your story and share your information," says David Szymanski, director of Texas A&M's Center for Retailing Studies. "I think it's part of the whole trust system."
It's not information overload, not in today's market where stocks move on bad information and outright lies. Amazon.com shareholders more than anyone should understand the harm of speculation. Amazon.com executives, who have long railed against rumormongering, should embrace better control of the news swirling around their company.
Retailers especially should disclose as much as possible, because retail is the barometer for the consumer demand that drives the whole economy. And if Amazon.com is truly a major retailer, it should be part of the process.
"I'd love to see monthly reports from online retailers," Niemira said. "I'd love to see more monthly reporting (from the retail sector as a whole) because that's where you get the first inklings of change."
Or lack of it. Amazon.com always says its business is improving, and there's no better way to convince investors of that trend than to provide frequent statistics to back it up.
Keep in mind that there's no reporting standard for the retail industry. Although most retailers release monthly reports, not all do, Niemira points out. And retailers have different definitions of "comparable" business, Niemira says.
But it's not really that hard for Amazon.com to come up with a basis for comparison. The company in the past talked about the difference between young businesses and those extant for at least a year, such as the books, videos and music department. Product categories would make fine demarcation lines for a monthly update.
Maybe Amazon.com is considering it, who knows? The company didn't respond to a phone query this morning. Hopefully Amazon.com will join its peers, so we can truly see how it stacks up as a retailer. 22GO>