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Very likely, you saw this headline today, as we did. “Amazon Announces $56,000,000,000 Profit.” For one quarter. Nice, eh?
The announcement also referred to Amazon as the world’s largest retailer, surpassing Wal-Mart. Again, how nice.
Meanwhile, another headline earlier this week: “Physical Stores Still Vex Amazon.”
Hmm. The “world’s largest retailer” not able to make stores work?! The hypocrisy of boasting about profits, most of which come from Amazon Web Services, not bricks-and-mortar retailing. Moreover, their “online stores” reports 11 times as much volume as their physical stores ($61.4B versus $5.2B.)
Well, if you are Amazon, a little hypocrisy will probably never be noticed. Oh, how nice.
Here’s some of what Kate King reported in the Wall Street Journal:
“This [closing of Amazon GO stores] is hardly Amazon’s only misfire in the physical-store universe. It has closed dozens of its other branded retail stores in recent years, including bookstores, fashion outlets and its ‘4-star’ locations stocked with best-selling items from its website.”
“After a decade-long experiment with bricks-and-mortar stores, Amazon’s dominance online has yet to translate into a successful strategy for connecting with shoppers in the real world, retail brokers and landlords said.”
“‘I don’t think they [Amazon] really understand retail,’ stated Nick Egalanian, president of SiteWorks Retail. ‘Running warehouses and shipping stuff is not the same as greeting a customer and saying ‘May I help you?’”
“‘Reducing the number of employees available to help customers and giving priority to credit-card payments over cash limits sales and makes the shopping experience more cumbersome,’ said Egalanian."
“Amazon now licenses its Just Walk Out technology to more than 200 retailers. This allows it to profit by marketing the technology without the cost burden of operating a store.”
Amazon is a remarkable technology company and technology platform. No question.
However, the delicate art and science that independent retailers make look so easy has yet to be accomplished by Amazon. And maybe never will be. We just have to live with Amazon’s hypocrisy.
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“Physical Stores Still Vex Amazon,” Kate King, The Wall Street Journal, February 4, 2025.
As Amazon Prime Day approaches – it is June 21 and 22 this year, the earliest ever for this 48-hour promotional event – retailers from all segments are wondering (or being asked): "So, how do you compete with Amazon?" Our response? You don't, at least not directly. Yet independent retailers do have many strategic advantages over Amazon. But you must recognize them, and enhance them at every opportunity. Here are some ideas that you may want to consider.
For retailers, the uncertainties caused by the impacts of the Covid-19 pandemic are unrelenting.
So, what should we do with this additional "found time," waiting for the customers? That's a question we CAN answer!
As you are sorting out how best to reopen, we encourage you to be bold about embracing technology. Not just a POS system upgrade with better e-commerce capability. There's much more that warrants your attention.
There's a whole alphabet of resources out there, already being embraced by many: ML (machine learning); AI (artificial intelligence); AR (augmented reality), QR (Quick Response matrix barcodes). All enabling chatbots, robots, digital displays and much else to become "smarter" and more applicable.
For some time, conventional wisdom has characterized independent retailers as "technology laggards." Not that they are Luddites; it's just that they regarded retail technology as a major expense, especially in human capital. They often were cautious, even skeptical, about the promises of new technology being pitched to them. When the pandemics arrived, many retailers responded rapidly and smartly. In scramble mode, some crammed five years of technology adoption into five months! Now, as the lockdown restrictions recede, the conventional wisdom eagerly suggests that consumers of all ages will continue to rely on online shopping and other technology. Hmm. Let's consider that "conventional wisdom" a bit more closely.
Spring is in the air. More places are lifting Covid restrictions. Daylight savings time starts this coming Sunday, extending the evening hours. And, for the first time in years, we can expect to celebrate Easter, Mother's Day, Father's Day, graduations, weddings with few restrictions. All promise a renewed air of celebration! There is widespread anticipation that consumer spending will be very strong. But...spending on what? Before you place all those merchandise orders, consider this.
An article in the Retail Dive Brief* on August 5 jumped out at us with some fright. (We’ll get to what concerns us greatly in a moment.) Here's what was shared:
As reported by Max Garland, Amazon Merchants who use Fulfillment By Amazon are advised to send their holiday inventory to Amazon during August and September, to arrive no later than October 19, a week earlier than last year. (And six weeks in advance of Black Friday.)
And Garland cautioned, "Sellers who miss the October inventory receiving deadline may have tough luck finding space at Amazon’s fulfillment centers."
But merchants need not worry. (And this is what concerned us.) Amazon can assure that "sellers will have enough room for six months of inventory on average." 👀
As Amazon's second two-day Prime Day of the year approaches – this one is October 8 and 9 – retailers from all segments are wondering (or being asked): "So, how do you compete with Amazon?"
Our response? You don't, at least not directly. Not on their turf.
Look, independent retailers do have many strategic advantages over Amazon. Your challenge – and opportunity – is to recognize them, and enhance them at every opportunity. Here are some ideas that you may want to consider to allow you to compete on your terms.
No more attempts to be all things to all people. Instead, focus on the portion of your market – and the customers – that are most profitable for your operation. (Go here for more about that.)
Remember that life stages (presence and ages of children in the household) drive buying decisions. Shoppers from which lifestage are most profitable for your stores?
Incredible value! 👀
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