The Idea: Like a bad divorce, the fallout of the Amazon acquisition of Whole Foods has inspired many top retailers to draw a line in the sand, encouraging their manufacturing partners to “pick a side.” Are we entering a new era where manufacturers, service providers, and new entrepreneurs must choose who their preferred distribution partners are? Welcome to the Great Retailer Divide – there are implications for every firm in this ecosystem.
For most retailers, the stock market closed last week with significant decreases in their shareholder values. The effect of Hurricane Bezos continues to create shock waves across the financial industry. One thing remains true: Amazon’s entrance into the brick and mortar space has forced the industry to readjust its mindset. Retailers, manufacturers, service providers, and consumers all must learn to coexist in this new world.
The industry is at the front end of a significant shift. And the best organizations will create strategy supporting both Amazon and their traditional partners. We will discuss this shift at next months IMPACT Forum in San Diego. Our discussion will focus on:
The Value of Experience
Amazon will now likely bring the infrastructure needed to dominate the logistics of click-and-go, farm-to-table, and home delivery models. Kantar’s Bryan Gildenberg reminds us in his Kantar Retail podcast, “There are much bigger, more complicated problems that Amazon has solved than grocery efficiency.” Focusing on the shopping experience may prove to be the most valuable differentiation method a retailer or brand can offer a consumer. The Container Store’s model of hiring one “great” employee instead of three “good” employees seems more important than ever. Even if Amazon dominates the last mile of delivery, consumers are still looking to invest their heart and wallets in brands and retailers that offer unforgettable experiences, respites, and playgrounds. How do you create an exclusive shopping experience for your top retail partners?
Higher-Level Partnerships
Higher-level, transparent, joint business-planning discussions with your top retail partners are no longer optional. We historically aligned around shared “interests,” and manufacturers and retailers must now align around shared “values.” This is the formula for birthing a distinct buying experience that attracts and retain loyal followers and advocates. We need to learn to be open, nimble, and true to the company’s higher calling. Are you willing to be that honest with your top retail partners? What’s stopping you?
Perfect Customer Feedback Strategy
More than anyone, Amazon understands convenience. That’s why everyone else needs to understand emotional connections and how others experience them. Amazon wins efficiency and ease of use, but they are totally impersonal. How does your tribe see you and are you fully embracing their criticisms of your solution?
Have the courage to ask the following question at your next meeting: What aren’t we hearing from our best consumers? And why?
The very best brands, retailers, and technology providers will learn to thrive in this new economy. They will reinvent, reconfigure, and reimagine themselves, uncovering new ways of emotionally connecting with their core consumer.
We all must learn to coexist and thrive in a disrupted world.
