As we all know, Amazon recently spent a cool $13.7 billion on the acquisition of Whole Foods Market Inc. In doing so, Jeff Bezos et al. tipped their hand towards their long-term strategy to conquer brick-and-mortar retail. Now, more than ever, local businesses must learn how to adapt and provide customers with a product not even Amazon can duplicate. Let me explain…
The purchase comes as the internet giant’s latest salvo in the ongoing battle for the future of the $800 billion U.S. grocery market. It’s a fight that Amazon has brazenly brought to the domain of expansive physical retail giants, who have been forced to fight back (see: Walmart’s purchase of Amazon competitor Jet.com for $3.3 billion in August ’16). Despite the relative brashness with which Amazon has attempted to penetrate the market, their efforts to construct new customer behaviors around online grocery ordering have yet to yield results equal to the pomp and circumstance of their innovations. While articles touting Amazon’s drone delivery plans and the recent pop-up of their brick-and-mortar stores have grabbed headlines, Amazon’s existing grocery delivery service, AmazonFresh, has yet to achieve widespread adoption.The acquisition of Whole Foods, however, has the potential to jumpstart Amazon’s grocery designs by providing an already-existing infrastructure that would have taken the company years to build from scratch. Each one of the 465 Whole Food locations in North America will most likely take on a newly expanded role: no longer just a retail storefront in their own right, but a localized warehouse of sorts, where workers can fulfill — and subsequently deliver — grocery orders placed online. It’s a scheme that cuts right through the monumental logistical hurdles that Amazon would have faced if they chose to create a similar nation-wide infrastructure of their own from scratch. Now, whether Amazon has such designs (or even grander designs) in mind for the Whole Foods acquisition remains to be seen, as does the level of cooperation and eventual success of the partnership in general. But while there is no guarantee that this acquisition will be the cure-all for Amazon’s grocery struggles, what is absolutely clear is that Amazon is going all in with trying to establish end-to-end control over the user grocery experience.
For local business owners, this news was most likely met with a fair amount of eye rolling. It is a rational corporate move from a rational corporate beast that has for years been the source of many sleepless nights for local business owners, each of whom lies awake thinking about how they will be able to compete against Amazon’s economies of scale. But while the acquisition makes clear Amazon’s intention, it also throws into sharp relief the simple fact that there is one advantage local businesses have that Amazon can never truly replicate: the potential for a truly authentic, unique experience in a local independent business.
I believe that people want local. If they have the means to do so, they want their eating and shopping to be distinctive, tailored, and special, and when it comes to retail and dining, that equates to local. For local business owners in the age of Amazon, the in-store experiences and brand interactions that create relationships between business and regular customer are going to be more important than ever before. More important than the products on shelves or menus will be the product of the customer experience offered, and it’s a product that will necessitate business owners adapting to new tools and best practices to not only capture but retain new regular customers. “Adapting” means going beyond implementing traditional methods of punchcards and customer loyalty programs. Instead, business owners need to emphasize the intangibles of good customer relations across all facets of the business.
Take Brian Noyes for example. Brian is “Baker-in-Chief” at Red Truck Bakery. Red Truck is tasty, welcoming, and, with two storefronts in the neighboring Virginia towns of Marshall and Warrenton, very local (note: the author is a longtime fan and unapologetically biased in favor of any establishment that bakes “Moonshine Cakes,” as you too would be if you tried one). Brian seems to be everywhere at once. He’s behind the counter ringing you up, visible in the kitchen tasting things, and greeting every familiar face with an affable, down-home charm. People frequent Red Truck Bakery for not only the quality of the product, but the quality of the experience as well, and that quality of experience starts from the very top. Brian makes every effort to make each customer feel like a part of the Bakery. The effort shows in the attitudes of staff members towards customers, in the smart, family/community-oriented marketing that Red Truck does over email and social media, and everywhere in between. Even the layout of Red Truck lends itself thoughtfully to a quality customer experience. The clean, well-lit space is filled with interesting merchandise and ample seating, all of which encourage customers to linger. It’s no surprise that people keep coming back.
Local business owners must be able to offer customers an experience that goes beyond simply buying a product. The authenticity that comes from being a local independent business needs to be shown off, marketed, and remain a key part of the business’ brand even as it grows. Ultimately, selling this authenticity to customers is more important for businesses than selling any single product. It’s a tall order, for sure. But local business owners should take some confidence — and pride — in the fact that they are able to offer their customers something that the Amazons of the world will never be able to replicate. The more regular customers they can get to buy in, the higher the chance they won’t have to sell out.
Pique your interest/want to discuss? let me know at firstname.lastname@example.org! Credits to Ayesha Prasad, Ryan DeCosmo, and Peter Schwartz for checking out drafts and edits.