Amazon has risen to the top while pursuing a vision that goes far beyond just being a retail monster…
CEO Jeff Bezos intends for Amazon to become the key structural element in commerce itself, and they are certainly headed in that direction.
Last year they claimed 44% of all U.S. e-commerce sales. And 33.5% of all U.K. e-commerce sales as reported by the retail gazette.
While many retailers bemoan that Amazon has so much power and try to compete directly with them on price. Smart retailers decide to take them out of the equation completely and find a niche where Amazon can’t play their game.
Smart retailers don’t sell off the shelf products anymore. Off the self products are easy, Amazon deliver them cheaper and faster than you or I can ever dream to achieve. Smart retailers design products that require a service element, and a service element that Amazon would find very difficult to achieve within their business model.
Take fire extinguisher retailing. Amazon can supply these much cheaper & deliver them much faster than any other retailer. But they don’t have the feet on the street to service them. So instead of just selling them at a fixed price, some retailers are now charge a low fixed monthly fee that includes the equipment and crucially, an annual service agreement to make sure the extinguishers meet your legal obligations.
Another example is lawn care. Amazon sell loads of different types of lawn care brands. And no doubt can supply them quicker and cheaper than any other retailer. But they can’t come round to your house, choose the right formula for you and sprinkle the exact amount required for each season of the year. But someone like Green Thumb can.
I’d even use our small organisation managed print service (MY Print Service) as an example too. I’ve no doubt Amazon can supply business rated multi-function printers much cheaper than we can. But can they provide the right one for you with unlimited cartridges and guarantee service for just £24.99 a month (including the printer)?
We’ve even taken this same principle and designed a similar service for families too. We know families with school children print loads & Amazon can supply home multi-function printers cheaper than we can. So we designed a service called INFINITY for families & for £11.99 a month they get a ‘fit for purpose’ multi-function printer with unlimited cartridges and guaranteed service. Can Amazon do this?
So what’s our advice? Don’t compete with them. Change the goal posts. Design a service package around your existing product. Or change your product to something that can be sold as a service which Amazon can’t deliver.
Whether we like it or not, they are a retail monster, already the dominate force and will only get bigger. It’s time us retailers stand tall, embraced a bit of innovation and re-designed our business models to become Amazon repellent. So whats your strategy?