5 Things Retailers can do to Outcompete Amazon (Bezos! Do NOT Read!)


Justin Li

Are you a Retailer? Great. We wish you to flourish.

Here's a few clever tricks on how.

Today's commerce is dominated by entities such as Amazon.com. Being a retailer can feel more like "David and Godzilla" than "David and Goliath." But take heart! Here are "five smooth stones" -- meaning, five cunning hacks -- for your virtual slingshot.

Retailers must up their game to compete with Amazon

There are advantages that Amazon can't hack.

These tricks of the trade are designed to enable you to outcompete even the most gargantuan of your online rivals. (Yeah Amazon. We talking about you! Jeff Bezos? Go build your lunar lander over at Blue Origin for awhile. Avert your eyes!!!) 

So?

'Sup?

Master Your Wares! As a "human-scale" retailer you have a much greater ability to master the nuts and bolts of your products than Amazon possibly can. Psst. BIG REVEAL!  That's how our ancestors, the furry little mammals. beat out the gigantic dinosaurs.  The dinosaurs are gone. We're still here! 
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      • Today’s customer is exceptionally sophisticated. Amazon is not configured to add expert value to their buying experience. And it cannot be. It carries way too many products. Amazon uses a proxy of customer reviews. And there's no way to evaluate the expertise of the reviewers. And that process is coming under fire as subject to manipulation. 
      • And, you can master your wares.  How? Most retailers can't responsibly order in quantities large enough for a manufacturer to justify the cost of providing you with personal tutorials. So, if that describes you, what to do? 
      • Most manufacturers have all the educational content you need posted on their websites and their social media. Listen, Bezos may be the smartest guy in the room -- in America -- or in all of recorded history.  But Jeff just doesn't have enough eyeballs to assimilate all that information for the millions of products Amazon retails. He doesn't even have enough minions! 
      • You do.  (Eyeballs, not minions.)
      • HA! ADVANTAGE DAVID! GODZILLA FALLS. 
      • So, take the time and make the effort necessary to develop expertise in the products you handle. You can probably extract it from your suppliers' websites, faqs and dope sheets, and fast. Then inject that information in your sales channels: your websites, your newsletters, your advertising, and, especially, in your customer interactions. 
      • That way, you are always steps ahead of the super gargantuan Godzilla, Amazon.com.  (Sorry, Jeff.)
      • You also stay ahead of the trend away from retailers and toward Brand Ambassadors and Influencers.  Your customers will super appreciate you if you develop mastery and become their shrewd concierge. Your customers will reciprocate your expertise, valuing your ability to save them time and making sure they get the best deal, with loyalty.
      • They will gladly repay you. With money.
    Create a rich customer experience. Rediscover your art and skill of merchandising. There's a rich market segment that will gladly pay a premium for a superior visitor experience. While it is important to stay competitive it can be a big mistake to cut costs to the point where you reduce the ability of the customer to interact with your merchandise and your sales team.
      Peloton creates an immersive retail experience
        • The trend in retail is moving toward experiential interactions. Many thought leaders in commerce -- Apple, Tesla, Peloton, Bose, Dyson and Microsoft to name but a few -- are moving toward providing a rich, immersive, and even an interactive, shopping experience. Many of your best prospects prefer that to a cheap, bare bones, DIY.  Do It Yourself takes time, effort, often invites hassles and frequently is simply baffling.
      Reduce overhead. The days of one- and even two-step distribution have gone the way of dial-up modems. Today’s marketplace is global. Gone are the days where manufacturers could build in two-step distribution margins. Price pressure from overseas competition is simply too fierce and too fast.
        • Retail space is over-valued. Negotiate it down with your landlord.
        • The tectonic shift in the commercial real estate market will allow you to drive much harder bargains in lease negotiations. Foot traffic is much reduced as a source of revenue. Negotiate accordingly. Landlords reluctantly will embrace the reality of the digital age and accept that the market has reduced the value of their assets. This creates a huge win for consumers. Retailers must cut costs to compete profitably. Here is one source of savings: retail real estate tends to be overpriced. This is evidenced by the many first-and-second generation shopping malls falling like dominoes.
        • That said, just because we're bargaining harder doesn't mean we shouldn't sympathize. It is in the retailers' interest to be your landlords' active allies in pressuring state and municipal governments to reduce the tax and regulatory burden on real estate. State and city officials mean well. But they need to hear from their constituents -- yes, you! -- early, often, and repeatedly. Deliver the message not to kill the goose that lays the golden eggs. And keep delivering it.
        • Don't dangle your status as a philosophical ally in front of your landlord. Actions speak louder than words. Be an active and enthusiastic ally. Proactively pressure your state and local elected officials to take the steps needed to prevent your hometown from becoming the next Detroit. CC your landlord and coax your friends and colleagues into joining you in that.
      Add value! Look for ways to add value to the purchase experience. That will prove more profitable than just looking to do an old-fashioned retail markup. Those days are going, going, and ... with shoppers becoming more and more sophisticated in online comparison shopping will soon be ... gone. A distant memory.
        • Some retailers add on services like insurance for purchases. This is usually a bad move. Most product insurance is of little-to-no perceived customer value, especially for high quality merchandise. Warranty policies are already designed with social media in mind. Customers expect robust coverage. Also, warranties -- both in the customer's reading the fine print and in exercising them in the event of a defective product -- are almost pure hassle. 
        • Instead, look to add experiential value. For instance, offer online training to teach customers how to become power users of their new purchases. Embrace “show-rooming.” Create micro-footprint and popup stores where customers can experience and test products IRL ("In Real Life") ... and buy on the spot. (As Carrie Fischer once said, "Instant gratification takes too long.")
        • Enhance that presence with a QR code scan giving your customers the lowest price out there. Doing that will assure the customer they are getting the best possible prices. That minimizes the fear of buyer's remorse and maximizes the buying impulse.
      Take Calculated Risks. Risk has been re-priced in the Amazon world. Amazon takes roughly 20-30% of each Prime transaction net all of the various fees. This is a far cry from the 50% margin demanded by most retailers today. It is especially noticeable to consumers with Amazon's ordering process so easy and its delivery so fast, cheap, and reliable.
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        • Amazon enriches the customer's experience with speed and convenience. And the manufacturer is empowered with predictive sales data for inventory planning purposes and the ability to leverage their amazing platform. Avoid being squeezed in between. Streamline your operation and move toward seamlessness. Check your back office for efficiencies.  I promise you, you will find them. Once implemented they will allow you to cut your prices while fattening your bottom line.

        And there you have it.  Five smooth stones! Once upon a time, dinosaurs roved the Earth. And ruled it. That was called the Mesozoic Era. Today's dominant e-Commerce retailers look like those intimidating Thunder Lizards, T-Rex and Apatosaurus. Only bigger. Like Godzilla.

        But guess what? The small, agile, furry little mammals from whom we are descended (unless you are a fundamentalist Christian in which case, yes, we agree, Adam and Eve were our ancestors too) took over. (AND the dinos wouldn't fit onto to Noah's ark so ... hasta las vista baby).

        So ... whether you are descended from marmots or from Adam and Eve, the dinosaurs are gone.  And we're still here. 

        Same deal, eventually, with commerce. Use these five great hacks to outmaneuver the behemoths. Then, after the Mesozoic Age of online commerce ends -- come on, Sweet Meteor of Death, what's taking you so long??? -- the behemoths will be a dim memory while we -- you and me -- will be fruitful, and multiply, and replenish the Earth.

        And subdue it.


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