Play it Like Amazon
This article has been written by Catherine Barba, Founder at PEPS Lab, Founder at WinforumNY and daphnipolitan.
SINCE I SOLD MY E-COMMERCE COMPANIES, I have spent the last years overseeing and participating in the digital transformation of large retail organizations, in France and the U.S. I still believe that stores are the most vital asset in the customer experience, but I now understand how extremely hard it is going to be for retailers to resist Amazon.
I am very impressed by Amazon Go grocery store concept where cashiers are taken out and items checked out via Amazon account. They have started small with just a few stores, they are now testing, measuring, learning, then they will deploy and execute with legendary efficiency and speed. Over the years, Amazon has built stunning assets: an incomparable logistic distribution, a superior capacity to innovate, a growing capacity for negociation due to increasing volume of purchase, a huge base of loyal — if not Amazonholic — customers. And a strong brand. Amazon, and some U.S. iconic startups with vertically integrated model (moving into physical retail) such as Warby Parker, Greats, Jack Erwin, Casper or Bonobos taught me that there is nothing more powerful than having a strong brand identity that people love — I love the way Amazon focus their energy on constantly simplifying my user experience.
The Amazon Dash button, which is frictionless fast and easy, is also very impressive. Only the subscription model, (Amazon Dash, Stich Fix, Birchbox, Blue Apron…) allows to engage with the customer post purchase, build loyalty and recurring revenue and understand better customer usage habits. More virtual buttons are coming on Amazon, that are automatically generated from your past purchases. Focusing on the category of the basic regular purchases, Amazon starts the wave of purchases through Alexa and will soon integrate with household equipment manufacturers, washing machines, fridges, dishwashers…
Confronted to Amazon’s aggressive strategy, very few retail CEOs are well aware of the emergency to reinvent themselves.
1. The vast majority of CEOs I’ve met have not recognized the seriousness of the threat because they continue to generate profit. Why would they upend processes as long as they are not losing customers and cash? Established companies with consistent, profitable revenue stream don’t urge to invest massively in products, services, customer experience both in-store and online, omnichannel logistics, nor to purchase startups in big data, mobile, or social media — if it’s not broken, don’t fix it.
2. The long term health of their company is not their priority. I’ve also met many CEOs — who should take the lead in digital change with the continuous support from their C-level management team — with a low capacity for taking risk. They are cautious about change, because change is expensive, time consuming with no guarantee on ROI. Long term orientation affect your status in the company, because your’re going to have a lot of failures along the way.
3. They forget to play. — Most importantly I’ve seen many CEOs with a low ability to challenge their point of view. We tend to hear from people who think exactly like us, we are surrounded by people just like us. But we need to surround ourselves with people who make us feel uncomfortable. If an idea doesn’t scare you, it is probably not very innovative. And the scary idea for retailers today is that people don’t just visit their stores to buy things. The least interesting thing about a product is purchasing it. The lines between shopping, living, learning and playing is blurring and will blur even more in the coming years. “As a grown-up I often forget to play, I try to surround myself with objects that remind me to lighten up” said Beth Comstock, Vice Chair at GE. Retail CEOs should not forget to play out of their comfort zone if they want to support and expand their core business, identify adjacent opportunities that can extend their assets to new markets or customers, and create entirely new businesses to resist Amazon.
Catherine Barba @cathbarba is a French-born entrepreneur and digital pioneer based in New York since 2015 when she launched PEPS Lab, a Retail Innovation Center that discovers the newest, most promising omnichannel practices, from major retailers to fashion brands. PEPS Lab has a rapidly growing list of major retail brands, of both French and American origin, including Orange, AccorHotels, L’Oréal, Axa, L’Occitane, Nespresso…
Barba has founded and sold several e-commerce and digital businesses in France. She is the author of several books about e-commerce and retail, including “2020, the end of e-commerce” or “Stores are not dead”.
A trusted angel investor and mentor, she serves on the board of successful tech startups, including Leetchi, Reech and Retency, and on the board of multinational organizations such as Renault (automotive) and Etam (lingerie and fashion).
In 2015 and 2016, she was named one of 50 most influential figures in Europe’s digital economy and in 2014 one of 3 most influential female figures in France. She co-founded the ‘Journee de la Femme Digitale’ in 2013, and the ‘Women in Innovation Forum NY’ in 2016. http://www.marieclaire.com/career-advice/news/a20342/catherine-barba-win-tech-conference/
