Looks like incremental innovation ("continuous improvement") is back in style. The recession has hit R&D budgets and corporations are looking to scale back costs rather than introduce entirely new products, services or concepts.
While many tech companies are focused on new products, services and business models, Amazon is focused more on new ways of wringing efficiency from its operations. And in a year when consumer and business spending is slowing, focusing on new ways of improving how you do things may yield more returns than coming up with new things to sell.
A lot of investors would prefer to see the benefits of this work boost earnings rather than lower prices. But the low prices are helping Amazon build market share. Its revenue in the past two quarters has risen 18 percent while overall online sales were flat or down. And Amazon’s obsession with waste removal has provided new sources of revenue — in essence, selling to other companies the efficiency it has built up for its own operations.