How do you make your competitor important? Start following them, participate in their events, imitate them, buy into all the technology that will supposedly will make you equally competitive.
What did retailers do? Exactly what Amazon expected them to do get into the bubble they created for them.
I have always said that you are either creating trends or chasing them. Cyber Monday is an event and trend created by Amazon and every retailer has followed suit. Not just because consumers piled in and retailers saw sales erode to Amazon. They followed Amazon because they believed that they didn’t have another choice. Actually they didn’t and only because I don’t think anyone thought about one. Instead every retailer impacted by Cyber Monday jumped in with both feet and guess what they’ve been helping Amazon all this time.
Can you imagine taking part in an event that quite simply one giant e-commerce player and those selling on their site have all the cards in their favour and retailers are being drawn into this bubble. I get it, of course what choices do retailers have. If you don’t have an effective e-commerce strategy your dead. If you don’t participate in these events your dead. However the irony is that Amazon is weakening retailers whether they participated or not.
But Retailers Do Have Any Other Choice? Perhaps they need to ask themselves how many of those internal and external strategies that they are pursuing are drawing them deeper and deeper into the bubble? The slew of retailers that have failed in my opinion were drawn deeply into the bubble and couldn’t get out.
What choices are there?
Why hasn’t Walmart started Walmart Day (for the lack of creativity?)
Why hasn’t someone created another sales e-commerce event or otherwise that doesn’t belong to Amazon?
Answer: Because Amazon and Alibaba (another giant) have become such powerhouses thanks to everyone who has been following suit.
No matter what happens Amazon, Alibaba and others will dominate and take share from any event that someone else can create.
Now don’t get me wrong I am not saying don’t participate in Cyber Monday. What I am saying is that retailers need to get smarter and out of this bubble.
I am not a big Amazon or Alibaba fan but here is the bottom line, they have outsmarted traditional retailers who have believed that things will either settle down or that all the customer experience initiatives will keep customers. Nothing can be further from the truth. From where I stand unless you have a great deal of cash on reserve or balance sheet to back it up. This is another part of the bubble.
Last week for the first time I came to the conclusion that based on the current trends of e-commerce and consumers moving towards less friction. I have decided that e-commerce will eventually become 50% of all retail sales. That doesn’t mean that retailers with stores will achieve that (sorry!). It means that the trend will shift in that direction because it’s the future. The other 50% will be in stores and like my real world lessons in China, stores are sometimes just showrooms. Get use to that.
If you want to get out of the bubble it all comes down to the Four A’s of Retailing (Affordability + Attentiveness +Access + Attractiveness) This is what’s driving the success of Amazon and Alibaba. You will find it in Chapter 20. I am doing everything to keep retailers outside the bubble.
By the way what do all failed retailers have in common? The never read the Great Transition: The Emergence of Unconventional LeadershipMy name is George Minakakis and I have led all the changes everyone else just talks about.