A few words of context
- In April 2018, 100 million Americans were subscribed to Amazon Prime; that number has grown by 25% in a year.
- The share of affluent US consumers able to identify a “favourite” retail brand has decreased from 47% to 28% 2008-2015 (67% to 37% for luxury hotel brands, 80% to 61% for fashion).
- In 2017, the number of Americans using a voice assistant device was expected to increase 129%, to 36 million, Amazon capturing 70% of the market.
Amazon dominates the traditional Marketing Mix.
The company efficiently negates the power of branding, leverages economies of scale to influence price and doesn’t shy away from developing and marketing close copies of successful products.
In times when trust in peers by far exceeds trust in advertising, its ubiquitous customer reviews offer the optimal form of promotion. Finally, the company continuously improves product accessibility through various experiments in ever-easier order placement and ever-faster delivery.
According to business intelligence consultancy L2 Inc., the commercial landscape in a sector changes drastically when e-commerce penetration reaches 20%, a theory supported by the cases of Borders, RadioShack and Toys ’R’ Us. There will be ample opportunity to test it further on sporting goods, apparel and home furnishings – categories crossing the red line in the near future.
What brands & retailers could do
If cashing out is not an option, develop a customer experience so good, it could successfully compete with 1-click purchasing.
How to do it
Whether working with in-house resources, a consultant or a succession of specialist companies, the following 10 steps are the roadmap to building a customer-centric brand for the Amazon era.
Step 1: Audit the experience you currently provide
- Go mystery shopping and collect first-hand customer experience.
- Play out the “challenging” scenarios – e.g. imagine you are in a rush or try bending the returns policy.
- Examine all touch-points: the physical and digital environments, customer services and communications.
Step 2: Establish corporate culture
- Work on this before you do anything else.
- Culture is not to be confused with work environment; it is about how the team operates, not how the employer makes that time feel less like work through beanbags and beer trolleys.
- Efficient culture:
- Unites the team around common goals
- Provides a set of principles to guide decision making
- Empowers even junior teammates to efficiently solve challenges
- Reduces resource waste
- Improves morale, limits infighting and staff sick days
- The process can take years but knowing what kind of business you are building would guide some of the subsequent actions.
Step 3: Review /develop brand ideology
- Consumers expect sincerity; sincerity is demonstrated by consistency of action; consistency requires clear guidelines to adhere to.
- Core ideological elements include: brand vision, mission and a set of values (guiding moral principles).
- The ideology needs to be simple enough for the least prepared person in the business to understand it without additional explanation, sincere, practical and inspiring.
Step 4: Define success
- Establish clear, tangible and realistic parameters of success.
- Consider factors beyond profit, e.g.:
- Customer satisfaction
- Staff motivation
Step 5: Define target audience
- The narrower the target – the easier to hit it
- If your product could be used by everyone (e.g. an affordable tracksuit) consider whether there is a narrower group you’d like to prioritise.
- If your brand were a person, who are the people he/she would like to spend time with?
Step 6: Consider what the target audience would want from you when they swing by (customer missions)
E.g. for a grocery store, some of the missions could be:
- “I am on a lunch break and need a sandwich”
- “I am doing weekly shopping”
- “I would like to cook something special for a person I’d like to impress”
Step 7: Build customer journeys – scenarios for completing the missions
- What steps would consumers need to go through to fulfil their missions?
- How can you provide the most value to consumers – before, during and after visit?
- Different missions come with different expectations:
- People on a lunch break typically want to find what they are after and leave as quickly as possible.
- Those shopping for a special occasion, on the other hand, may appreciate support (recipes next to product bundles, professional cooks sharing advice) and wouldn’t mind being taken on a little journey, be offered products they didn’t think of, if it pays off.
- Consider the roles various channels would play:
What is the role of your bricks-and-mortar in the age of ecommerce?
E.g.: could you introduce the lunch crowd always picking up the same sets to something new through the power of well organised tasting? They may remember it when they do weekly shopping.
When would be the right moment to introduce a human touch?
E.g.: could assistants help customers trying to cook an impressive meal by recommending a recipe, collecting relevant ingredients and explaining how to use them?
Is digital required, what for?
E.g. could customers pay for groceries in-app without queuing?
Be critical, be sceptical, and focus on value for the consumer. It is very common to be overly optimistic with regards to the consumer’s attitude towards your offering.
Do not expect to excite with hygiene factors like welcoming staff and intuitive store layout or digital gimmicks like VR shopping and personalised thank-you messages. Ensure everything you do, big or small, genuinely channels value to consumer.
Step 8: Develop customer experience
Translate the series of ideas alongside multiple journeys into a holistic ecosphere.
- What is your approach to formats – do they serve different roles or are they just smaller/larger versions of the same?
- How would customers find and navigate your space?
- What are the “hygiene” standard elements you’ve got to offer?
- How will you ensure “moments of delight” – unexpected exceedance of expectations?
- Why would people come back?
- Start with the tone of voice – do you speak the language of your target audience?
- Does the brand look the part?
- Is it promoted in the right manner?
- Probably the most important differentiator as human interactions are difficult to emulate online.
- How do you motivate staff to truly care and provide extraordinary service?
- What is their role – are they salespeople, advisors, community builders?
- Are you easy to find?
- How do you convert discovery into interaction and (possibly) purchase?
- What barriers can digital remove?
- How do you stay in touch with customers? What would deliver the greatest value to them? Personalised discounts, remote consultations?
Step 9: Measure performance
- Against the originally set KPIs
- Investigate if customers react to your ideas differently than expected – you may find barriers you didn’t know existed.
- Not all ideas need to work; but you must always be clear why something failed.
- Repeat regularly.
Step 10: Continuously improve
- Regularly repeat experience audit and act accordingly.
A perpetually self-learning AI, Amazon will change the role of retailers from reactive to proactive; from occasional purveyors to continuous lifestyle facilitators.
The good news – most poor retail experiences will not survive the next 5 years; the really good news – now is the time for all the bold ideas; provided they are informed, sincere and well-planned.
- Evolve or Die: How Traditional Retailers Could Disrupt the Game to Remain Relevant
- Amazon and the End of CPG Branding