Sure, Amazon’s Changed Shopping, But Retailers Can Still Compete — Interview with HowStuffWorks

by | Dec 9, 2017 | Blog

By Dave Roos

Full artlcle HERE

In his 1997 letter to the first Amazon shareholders, CEO Jeff Bezos laid out the three-word business philosophy that could soon make the online giant the first $1 trillion company in history: “obsess over customers.”

That simple, customer-centric credo has driven a string of innovations unmatched in American retail:

  • Amazon posted some of the first customer reviews next to its products (1995)
  • 1-Click (1997) eliminated the need for Amazon customers to re-enter billing information with every purchase
  • Amazon Prime (2005), a free-shipping loyalty program, has ballooned to become Amazon’s all-encompassing shopping and entertainment ecosystem
  • Amazon Kindle (2007) basically created the downloadable ebook device market and continues to dominate it
  • Amazon Echo (2015), a smart home gadget dismissed as a gimmick, became the top-selling item on for Black Friday 2017

And then there are all the innovations that Amazon’s customers don’t see, but that allow Amazon to make good on promises like same-day delivery. Scot Wingo, executive chairman and founder of ChannelAdvisor, an ecommerce strategy consultancy, says that Amazon’s 116 nationwide fulfillment centers and the “billions of dollars in investment to make that happen” all stem from that original shareholder letter.

“Bezos said in 1997 that customers won’t get tired of low prices, selection and great shipping,” says Wingo. “Here we are 20 years later and those are the things that have really differentiated Amazon from everyone.”

Onine shopping in the third quarter of 2017 accounted for 9.1 percent of total retail sales in America. That’s an increase of 15 percent over 2016, which itself was 15 percent better than the same quarter in 2015, and it’s expected to grow at that same rate for the foreseeable future. (Although you might be forgiven for expecting internet shopping to be a higher percent of retail sales by now, few people buy groceries and cars online, two of the biggest retail sectors.)

Does that mean that the Amazon way is the only way to win in retail? Not necessarily, says John Rossman, a former Amazon executive and managing director at the Seattle consulting firm Alvarez & Marsal, who not coincidentally wrote a book called “The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company.”

“For every company, it’s about knowing who your customer is and figuring out different high-value ways to serve them in unique ways that others would have a tough time copying,” says Rossman. “Amazon has its own approach to it, but I wouldn’t recommend that everyone follows Amazon’s playbook.”

One of Rossman’s favorite case studies is Nordstrom, a traditional retailer that could have faded away as a dinosaur of the mall era. But Nordstrom paid attention to its customer’s social media habits and nimbly incorporated in-store shoe displays of top pinned items on Pinterest and the ability to buy items straight from its Instagram feed.

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