By Doug Llewellyn, President & COO at Purch
When Amazon announced that it bought Whole Foods for nearly $14 billion back in June, the news sent shockwaves (if not ripples of fear) through the retail community. Is Amazon going to take over the grocery sector? Is the death of brick-and-mortar stores across all industries imminent? But as these and other nervous questions fly in the wake of the acquisition, retailers should be asking a different question: What can we learn from Amazon, and how can we follow its lead?
Amazon’s disruption of the retail world is nothing new. For decades, the e-commerce giant has reshaped the role that brick-and-mortars play in the customer journey, even spurring other retailers to follow suit. Take Warby Parker, for example. Founded in 2010, the company upended a $140 billion industry by moving the sale of eyeglasses online.
Of course, not every company can be the next Warby Parker, but every retailer can learn from the example set by Amazon. By studying the things that Amazon does right, companies can stop maligning this industry behemoth and focus on what really matters — building better businesses, both online and in stores.
Put customers in their place
Companies should start by remembering the old saying that “The customer is always right”. As the success of Amazon’s customer-centric model shows, that’s never been more true than it is today.
Luckily, retailers don’t have to be industry giants to provide top quality service or understand customers’ needs and expectations. Brick-and-mortar retailers can easily engage in conversations with shoppers on-site or collect customers’ email addresses to follow up on transactions. Tools like Survey Monkey or Ask Your Target Market are also great and affordable options for smaller retailers to dig deeper into the customer mindset.
Make it personal
Putting the customer back at the center of the business model might sound like some kind of metaphor, but it isn’t. Amazon and its ilk use technology to understand consumer behaviors and target shoppers with products that appeal to them. In essence, every Amazon shopper exists at the center of his or her own retail universe.
Companies like Best Buy have clearly taken notice. Over the past 12 months, Best Buy has doubled down on improving its e-commerce platform — making transactions simpler for shoppers, enhancing its customized product recommendations and incentivizing online shoppers to buy more with competitive pricing. In Best Buy’s case, these efforts helped pave the way for a major win: Its domestic online sales grew by 31.2 percent year-over-year during the second quarter.
With enough thought and planning, even small retailers, whose businesses may not be as technologically advanced as Amazon or Best Buy, can create customer-centric shopping experiences. E-commerce sellers can implement several different practices to personalize the shopping experience, including: seasonal deals, bespoke pricing and personalized discounts, suggested items to purchase and timely push notifications for mobile shoppers.
As Amazon’s recent foray into organic groceries shows, company business models can and should evolve according to new opportunities. Take, for example, Leesa, a mattress retailer that once sold its products exclusively online. In 2016, the company made a bold move when it opened its first brick-and-mortar location in one of New York City’s busiest shopping districts.
Recognizing when it’s time to try new things — whether that’s expanding e-commerce endeavors or creating a better real-world presence — is crucial to staying competitive. Be flexible, but focused. Channel experimentation around a goal, such as inciting buying behaviors. Then get creative. Offer discounts or daily deals. Diversify the products and services offered, and make sure that offerings are timely and seasonally relevant.
As retailers implement these ideas, they should also make sure to look beyond the now into the future. As they do so, they should take a page from Amazon’s hugely successful membership program: Amazon Prime. Membership models and cash-back programs go a long way toward rewarding the loyalty of repeat customers and enticing new customers to get on board. And you don’t have to run an Amazon-sized business to offer big customer perks. There are many tech solutions for smaller businesses that seamlessly integrate loyalty programs into POS systems.
By taking Amazon’s lead and keeping customers at the center, gathering data to better understand their needs and implementing practices and tools to make the overall experience better, companies can improve their own businesses and achieve greater long-term success. So instead of fearing companies like Amazon, perhaps we should all take a page from their playbook and follow suit instead.
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