How can you compete with Amazon?
Are you sure you want to compete with Amazon? Unless you’re a major retailer like Target or Walmart, probably not. But here’s something you need to know:
Whether you know it or not, you are already competing with Amazon!
Amazon has created a new customer expectation. It has set the bar for convenience, low friction, self-service shopping and customer service, and more. Customers have learned that they can get many of their essentials (and not-so-essentials) in an hour or two. He’s taught consumers what it’s like to experience this type of service, and they love him.
For years, I have told our clients that they are not just compared to their direct competitors. We are all compared to the best service our customers have received from any business. In my customer service keynote speeches I often ask, “What is the easiest company to do business?” It’s no surprise that the majority of the public (like 90% or more) will say Amazon.
It is about the “amazonation” of much more than the retail sector. This has an impact on how any type of business – this includes both B2C and B2B – handles new and more demanding expectations of its customers.
I have observed how the customer service and experience offerings of different companies have developed over the past few years. The COVID-19 pandemic has accelerated these changes. Here are examples of how some brands compete with new and higher expectations.
Kroger, the largest grocery operator in the United States recently ad that it introduces drone delivery in certain markets. According to the announcement made earlier this month, they want to provide “a transparent ecosystem and provide customers with anything, anytime, anywhere.” If Kroger wants to be competitive in the grocery delivery business, it goes hand in hand with Amazon’s grocery delivery program. Walmart and Target do it too.
Last year, Amazon announced the launch of Amazon Pharmacy, an online pharmacy that provides prescriptions through its website. It is an industry disruptor to Walgreens, CVS and all the other retail pharmacies. By the way, Amazon wasn’t the first to do this. Express Scripts (and others) have been delivering prescriptions to their clients’ doors for years. It’s just that Amazon has the ability to be the biggest.
How the the market reacts to Amazon’s announcement? Inventories in pharmacies fell. According to CNBC, Walgreens fell 8%, CVS fell more than 6%, and Rite Aid fell 11.9%. So how do these iconic brands in the retail pharmacy world compete with Amazon?
Think about CVS’s recent announcement that it is piloting a mental health therapy and counseling program at its local stores. He gives up high-value real estate in stores to provide a service, not just to sell a product. Walmart has also jumped into the mental health industry and operates 20 Walmart Health clinics. More than just an additional service that these retailers (and others) offer, the goal is to fit into the needs and daily routines of their customers’ lives. The more they integrate into their life, the more the customer is connected. This translates into repeat business and even customer loyalty by meeting higher expectations, building trust and meeting needs.
Amazon is as much an innovation company as it is a retailer. He crushed traditions and found new ways to give the customer a better experience. Not all companies can provide drone delivery, in-store health programs, or other services that large retailers do to stay competitive with Amazon. But, every business can look at what customers like on Amazon and ask themselves, “What are they doing that we can do?”
For example, how difficult is it to send emails confirming that orders have been placed, shipped, received, etc., which Amazon is very good at? Amazon customers – and that means your customers – love information. Updates via email or SMS are neither difficult nor expensive to implement. When you do, you’ve just overcome what was once a competitive differentiator for Amazon, which is simply keeping customers informed.
Some of the best competitive insights can be discovered by asking your own employees what they think Amazon would change if they took over your business. What services would they add? What would they eliminate? This will give you even more information on how to compete with one of the most successful and iconic brands in business history.