The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Emulating Amazon: To Be Or Not To Be?

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By this point, everyone knows that Amazon’s impact on retail is beyond calculation. As we speak, there are likely several different ShopTalk sessions, a handful of webinars around the industry, and countless LinkedIn think-pieces concurrently vying for your attention on the topic.

But RSR recently had a remarkable opportunity: to sit down privately with high-ranking power players from 10 different retailers and ask them exactly what they are doing – and what they wish they could be doing – to contend with the beast.

The line of questioning for these very candid discussions was framed around three simple concepts: what does/should retail disruption look and feel like, what are the steps to doing it well, and what can be shared (tech tips, organizational dos and don’ts – all of it) to help others on the path. The notes we compiled were voluminous, to say the least, and in the coming weeks, we’ll be trying to find clever ways to disseminate some of the best pieces from what we collected. But one thing that immediately jumped out was how unified most retailers’ viewpoints are on the need for the industry to band together to combat Amazon – and how disparate their viewpoints are on what that approach should look like.

In net: Yes, Amazon is our enemy – but should we try to be more like them or try to be nothing like them at all?

This is a complicated issue, but the thing that stuck with me most was that the choice of “to be like Amazon ” or “to be anything but Amazon ” is an entirely personal decision for each brand involved, and, more importantly no matter who you are, your size or what you sell – this is a decision that needs be made right now. It will likely not only determine whether your brand will still be viable 10 years from now, but also shape a great deal of what you do in the next 10 years to get there. It’s the question that shapes strategy. And people who successfully compete against Amazon a few years from now will not have done so by happenstance.

From the “To Be ” camp – check out this quote from the recently retired CIO at a $2B specialty retailer.

You need to determine which things are part of the waterline now. I was shopping the other day online and told that I needed to spend more money to get free shipping. Really? I expect free shipping from everyone all the time now.

Every day you have to look at Amazon and admire what they keep realizing – that there are all these ways to exploit enabling technologies to make the customer experience better.

I hear people always saying, ‘Don’t try to compete with Amazon.’ But remember this: if they are doing something they are doing it because it works on your customers.

These are valid points, and I’d bet if this IT professional were speaking on a panel right now there’d be a lot of heads nodding in agreement in the room.

But from the “Not To Be ” camp, here’s a direct quote from a tech leader at an $800m specialty retailer about his company’s approach:

I want to know exactly what Amazon is doing, but not to do it – to stay out of their way. If I try doing what they are doing, there’s no way I’m going to win.

When you think about the context, this makes perfect sense, as well, and probably brings just as many nodding heads. A mid-size specialty retailer is never in a million years going to have the might to compete in the same fight: in another conversation someone referred to this as a version of the David vs. Goliath story. So for retailers of a similar size, the question is not how to fight the way Goliath would, based on pure strength, but to innovate in a way the giant still quite can’t. And for all the doom and gloom that floods your inbox each day there are still plenty of ways to do just that. Mind you: this retailer operates stores, and on the topic of what they will look like in the future?

Stores are extremely important for us. They always have been and always will be. What do they look like in the future? What number will they be? That’s the part that is tough to say.

However, if we do a really good job of understanding our customer, we’ll eventually know the right number of stores – or physical points of interaction – over time.

That number won’t stay the same. It may expand, it may contract – it will all depend on our customer. We have to listen to make sure we’re making the right decisions. We’ll be quick to close a store if it becomes a place people don’t visit anymore.

I don’t share this conflicting information just to confuse our readers. It is actually meant to serve a much higher purpose. In this particular case, having spoken to both of these IT leaders and heard their detailed viewpoints on the future, I think they are both right. They have the correct answer for their brand, specifically, and have set off to work towards their ensuing goals with this strategy in mind for years to come. I believe both of their brands will continue to be incredibly successful. In part, because they’ve established their position early on: to be, or not to be… like Amazon.

That is the question. Has your organization answered it yet?

 

 


Newsletter Articles March 20, 2018