One of the most popular books at the airport bookstore right now is a detailed examination of Amazon by Natalie Berg and Miya Knights. “Amazon: How The World’s Most Relentless Retailer Will Continue To Revolutionize Commerce” was just published a couple of months ago and has been widely praised.
I heard one of the co-authors, Miya Knights, speaking about the book and retail more generally on a podcast recently and she made some interesting points. Here are a few comments on what I took from the interview.
Amazon focuses on how they sell, not what they sell: Amazon has changed how retail works. Traditionally, retailers focused on the product and worked out how to sell those products. Amazon focused on the process of selling, regardless of the product and they deliberately started out with books so they could master the sales process with a simple predictable product before becoming the “everything store.”
Retailers can compete against Amazon: Some can compete by moving the dial on how they sell, taking the same approach as mentioned in point one, but those without such resource can explore other ideas such as partnering with Amazon or looking for innovation partners, such as Carrefour working with Google or Walmart with Microsoft.
Stores and Main Street will not die out: Retailers need to get smarter about how they use their real estate, but they need to start thinking of it as a competitive advantage over online-only brands rather than a drain on their resource. Sam’s Club is a great example of one big brand that is taking a new approach that blends their in-store and online offer, creating a national chain of delivery hubs from existing stores. These initiatives will become far more common and will bring the online and in-store experience closer together.
The conventional wisdom has long been that it’s almost impossible to
compete with Amazon. This is certainly true if retailers continue to think only
of how to sell more products. Once they start thinking about the process of how
they sell, how they create a great customer experience, and how they can engage
customers in a way that makes them want to return then they can start behaving
like a 21st century retailer.
Amazon has revolutionized retail over the past couple of decades, but there are many other interesting stories and innovations taking place and we know that Amazon does sometimes launch products that don’t work – who ever bought a Fire phone or used Amazon Local instead of Groupon? The difference at Amazon is that they are really good at dropping these turkeys quickly – they move on fast. I haven’t read the book yet, but based on the interviews and media coverage, it sounds like a great read.