Amazon's Retail Revolution Business Boomers BBC Full documentary 2014. You can watch it on YouTube here: https://www.youtube.com/watch?v=6UhrIEUjtwI. (Or below I have the video embedded)
I came away with a few key points that all retailers MUST adapt to – or you may become irrelevant, Especially with Gen X & Gen Y.
The First Step is:
Have a vision and the passion for that vision, plus the unwavering commitment to implement that vision.
Essentially you need to be a 2015 disrupter! You can’t be a complacent thinker who only thinks about acting, you need to be a visionary who acts themselves into thinking.
Jeff Bezos recognized that internet technology would change everything. He imagined a destination where people could shop and purchase millions of products; quickly simply and efficiently. More on this later.
"What if consumers could shop all the millions of titles that have been printed, and purchase them on line, at one location; quickly & efficiently"?
He knew that by offering a virtually unlimited amount of titles, someone would buy "one of something". That's the definition of "The Long Tail".
What is "The Long Tail"
Chris Anderson, former editor and chief of WIRED Magazine defined it as:
"The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of "hits" (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all
One example of this theory's prediction is that:
Demand for products not available in traditional bricks and mortar stores is potentially as big as for those that are"!
Books along with their distribution outlets were a perfect target. They were entrenched in the old model of limited selection, which required a special trip to that location to browse and discover which titles available, with the hope of finding what they were looking for and that it was in stock. The old model was controlled by a few distributors who decided what consumers would have access to. BUT, there were millions upon millions of selections available that consumers may want to read, but didn't know about them because of the limited selection available at small retail footprints. In the old days, newspaper/magazine book reviews, In-Store recommendations and friend's recommendations drove sales. They are still a primary source in the buying process, but not before the Zero Moment of Truth.....finding the information consumers are looking for online as their first step in the purchase process!
Bezos believed in his vision and he implemented it with passion and commitment. He had no problem exploiting the old pedestrian model of retail, and to this day, he is committed to continuing this passion for his vision everywhere, in any retail sector, that becomes complacent! Does he feel bad that he is putting complacent businesses and business models out of business? NO, it's "the better mouse trap syndrome". Innovate or die.
He had a simple sales goal for all, Amazon wanted "more than their fair share in every category". Think about that, "More Than" equates to never being complacent with a sales goal and never achieving a final sales goal, for More Than always kept the needle moving>
The Home Furnishing & Rug Industry, as well as many other industries, have embodied and displayed the same attributes as the book store model, and many still do. And guess what’s happened? Wayfair, One Kings Lane, Overstock and of course Amazon.
WHY, because consumers may not like or want the limited selection you have on the floor or the limited selection offered on your website....
I've been lecturing, suggesting and ranting for years that retailers need to put their whole "open to buy" and inventory online. Why? Because 80%+ of consumers want to buy local, especially Gen X & Millennials. But if they can't find it local, they will have no problem buying it from someone else....20 states away or across the ocean!
That's why Wal-mart and other big box retailers exist...CHOICES, tons of them, and even that is now under attack because of Amazon's model. This isn't a fad or trend, this is retail today. The more you show, the more you'll sell and the more you'll make. Think Long Tail again.
Home furnishings products come in a variety of colors, shapes, sizes and more. Thousands of manufacturers and distributors with millions of SKU's.
Why limit your selection to brown or black, when there may be one or a hundred consumers in your market that may want colorful or eclectic options? Have you been following DIY shows and trends? It's all about "My design", NOT your design.
Look at this number when you put "furniture" in Amazon's Search:
So a difficult Step One - It's your website and it MUST BE MOBILE RESPONSIVE
YEAH, I know...here I go again. I've written dozens of articles/Rants on how to create a great website and what it takes to dominate, or even survive, in today's retail environment. You can find these on http://www.social4retail.com under My Retail Rants Blog.
The 3 marketing fundamentals still apply and are still profound:
- Attract new customers to your store/site
- Engage them with your products and your brand message and
- Connect with them transactionally by delivering sales leads and opportunities
- Site design and page layouts must be easy to search, view and navigate
- Show coordinating Items that match related items in a collection - i.e. if a bed has matching case pieces or if a sofa has matching chair, ottoman, love-seat and sectional
- Multiple Image Viewer and Rich Media to better show and demonstrate products
- Site Navigation - it should be logical, easy to use and simple to understand
- Merchandise Tagging and Sort Order
- Inventory Data Integration - for pricing, inventory availability, etc.
- Administrative tools so you can manage all the elements of your site
- Integrated Marketing to Communicate Promotions and Marketing Messages on Every Page of the Site. Remember, 60% of site entrances come from the item/brand page search and the consumer may never see your home page that shows your promotions.
- Wish List/Save Projects - tools that enable consumers to save their favorites and salespeople to save client projects
- Store location and information page with interactive maps
- Financing tools like online special financing applications are important for retailers that offer this.
Knowledge is POWER
So, you need product data, lots of it. Product data that contains tons of content, not just a picture and some romance copy, but comprehensive attribute data on every SKU or collection that you have "Open To Buy", even if that's over 100,000 SKU's, show it and sell it. Reference The Long Tail, above!
I know - you don't do special order for whatever illogical reason.....Queue Fire Alarm!
Remember, Amazon has 4.3MM Furniture items and it's all special order !!!!
OK, so we addressed How Amazon came to dominate books and now virtually every retail concept on the planet, but there are two more difficult choices you now must face.
Inventory Management, Point of Sale and Beyond
Amazon is relentless on this subject. They know everything that happens, at anytime, anywhere on the planet in nanoseconds. They measure everything down to how much time it takes an employee to find, pick and package an order. Do you?
What do you Measure?
Do you measure sales, expenses, and advertising returns to make more strategic business decisions daily or by period? Amazon does!
Do you measure attainable goals based on historical sales data? Do you maximize growth and create incentives for your sales team by developing a road map to increase average invoice amounts? Amazon does!
Are you ahead of the curve with robust reporting? Capturing best sellers, slow movers, shopping patterns, seasonal trends, advertising returns and more – and can you quickly generate any report you desire? Amazon does!
Do you keep an eye on purchase orders, approvals, consignments, and yearly sales comparisons at any moment, allowing you to stay up to speed with significant events and gauge areas of opportunity? Amazon does!
And these are just a few of the metrics Bezos has integrated into his business model. Businesses don’t grow by accident. The growth of your business isn't a matter of luck or the state of the economy, or anything external. It is the result of creating a plan and carrying it over to every aspect of your business with passion and an unwavering commitment to excellence.
The Third Step:
The relentless pursuit of excellence in "The Customer Experience" in everything Amazon does.
Millennials connect digitally across all platforms and you must be there, when, where and how they want to find you. If not, they will default to those companies that are.
If not, they will default to those companies that are. I'm talking about every social site that promotes local products/services.
You MUST include pricing on your website and provide a shopping cart to buy products on your website - PERIOD. (It is so easy to find out a price online for anything by Googling the SKU, loading the image into Google images and more) Get over “show-rooming” and embrace it! All you need to say in your marketing is you'll match any price on that "exact" item.
And don't forget Live Chat
the new video chat (here)
It seems today everyone wants to text each other, calling a phone number is Sooooo 20th Century. It's a fact Live Chat increases conversions, period.
Forrester Research goes on to state “62 percent reported being more likely to purchase from the site again.
A further 38 percent of respondents said they had made their purchase due to the chat session itself.”
By the way, Blogs are the #1 consumer influencer and blogging is more than writing an article, it includes reviews and much more.
Did you know: 77% of all Internet users read blogs regularly - accounting for 23% of all time spent online? Also, 81% of U.S. consumers look to blogs for product and service information, trusting what they read.
Television is not what it used to be, with DVRs, Hulu, Netflix and more, and think about newspaper advertising...Newspaper subscriptions are at 1950's level. You need to be utilizing print by integrating print in the mailbox, with digital print.
And lastly, and probably the most difficult is that: Retailers MUST fully integrate all of these elements with passion and a 24/7 commitment.
Now, hopefully your vision and goal should be clear. It’s not easy, but it is imperative if you want to survive in today’s retail jungle and sell "more than your fair share"