Amazon is not the enemy
No retailer really wants to mould their entire strategy around Amazon, but you know damn well some are. And it’s not hard to see why; a ruthless focus on making no profit, no shareholder value to deliver against, no store footprint other than the Amazon Go pilot. Then there’s a chief executive who is always prepared to think further than everyone else.
But Amazon is not the enemy. Sure, we all have to keep up, and their every announcement changes the retail landscape, but the real culprit is the customer. They care nothing for the retailers’ pain. In fact, they’ll make new demands and act unpredictably until even the once simplest of commercial activities becomes complex.
The customer is the most complex of all the variables in retail today. Their age, sex, race and location are the easy bits, because they are factual and structured. Now we are in the la la land of unstructured data where it is not just the rational mind that expressed its preferences, but the irrational heart as well. Even the customer doesn’t know what they are going to do next, never mind the retailer.
We are constantly told that retailers need to understand the customer better but that is only the start. The goal is proximity; getting close enough to react to and possibly pre-empt their needs. For that there is, as yet, no panacea solution. However, if retailers can agree that this is the correct direction of travel, then a whole host of technology available now can help for the journey.
The need for proximity explains why it is so important that retailers fix the last mile mess. This is where customers are at their most vulnerable. Their expectations are high, because they are so involved (however reluctantly), but they are often treated badly.
Using geo-location has already been proven by some of the courier companies to cut the costs of missed deliveries and boosted customer satisfaction. Getting last mile capabilities onto the point of sale, so that click and collect works seamlessly, is also working well. This contrasts the white palaces that some retailers are building into their stores as a kneejerk reaction to the volume of orders now coming from online.
Mobile apps are another way for retailers to get closer. Forget the first generation applications that delivered a single function. Consider the next generation of apps that can become the consumer’s access all areas to their favourite brands. Here is how retailers can stay close all the time, because the smartphone will soon become the primary channel to retail.
It will come as no surprise that Amazon has been named one of the world’s most mobile-ready brands. In fact, they are innovating in many of the other areas I have mentioned, getting even closer to that true culprit, the customer. Now it’s time for other retailers to give chase.