Cutting Amazon down to size
If you live in Australia, Amazon is coming. If you’re a retail business in Australia, you’re stuffed. Or so you’re being told.
The truth is, some businesses could well go under, but they’re going to leave an opportunity in their wake. It’s an opportunity that even Amazon can’t compete with for reasons I’ll explain. And it’s yours for the taking.
“They’re destroying us!” and “We just can’t compete.” were the most common refrains. Or, from another perspective: the most common self-fulfilling prophecies.
In 2004, bicycle shops were closing like crazy. Two internet-based companies akin to Amazon, Wiggle and Chain Reaction Cycles, were offering massively reduced prices on accessories, the high-margin items that were shops’ bread and butter.
“They’re destroying local bike shops!” and “We just can’t compete.” were the most common refrains. Or, from another perspective: the most common self-fulfilling prophecies.
In 2005 the bike shop I worked in closed out its financial year having increased revenue by 195%
How? It was simple really: We focused on our customers.
Quantity vs Quality
If estimates are to be believed, Amazon will be worth US$1 trillion by 2020. If so, they’ll be the first company in history to reach this mind blowing capital value.
If Amazon wipes out your lazy competition; brilliant, your opportunity is greater still.
They’ll have done it by disrupting sectors that had become so complacent they didn’t see what hit them. From books, to cloud storage, to groceries… the list goes on; the fact is they will sell a lot of items across many verticals.
Increasingly, they’ll sell them better too. Artificial intelligence will improve the customer experience. Their investment in infrastructure will result in faster, on-time delivery. However, my hunch is that they’ll never beat the person-to-person customer experience.
This is where your opportunity lays. Because you have the ability to focus on your customer in a way that will trump Amazon’s bots every single time.
You have the opportunity to ask questions and read body language. You have the opportunity to respond with understanding and knowledge.
If Amazon wipes out your lazy competition; brilliant, your opportunity is greater still.
Want vs Need
“Nobody who walks into a shop knows what they need. That’s your job, that is why you’re here.”
As sales staff, this was the quasi-mantra we adopted in our local bike shop in 2004. You know, the one that went from $1.8 million to $3.5 million revenue a year later. While everyone else was shutting their doors for good, and blaming it on someone else.
Amazon does many things well. The efficiency of their warehousing and distribution systems is setting the standard. In recent years their acquisition strategy has delivered win after win.
Amazon has an incredible engine for suggestion, and does an amazing job at profiling its customers. But at the end of the day they’re still throwing darts (products) against a board (the market) and finding places they stick.
In my case, we connected the dots between what people thought they wanted, and what they actually needed. Everyday was spent finding product market fit, again and again. And those customers came back because they knew we had their best interests at heart.
So while Amazon are doing it better than anyone else at scale, it’s still incredibly inefficient. Again, your opportunity lays in this inefficiency.
Establish high quality products that fit your market, and serve that market well.
Focus on your customers.
Adapt or die
It comes down to attitude. Amazon is a behemoth, a fact that inspires enough fear to make their march towards $1 trillion even faster.
Fear paralyses businesses as much as it does people. Those that can face, or better yet, ignore this fear will not only survive, they’ll flourish.
Truth be told, Amazon’s marketplace could be an asset to your own business, so long as you’re backing it up with the service they can’t offer.
You need to accept that, ‘yes, Amazon does some things very well’. At the same time, you can do things that they can’t. It’s not unfair, its reality. Get a grip on this, and go forward.
Be agile. Build rapport, ask questions, offer the right solution.
Whatever you do, don’t blame Amazon.
