It’s Not About Amazon
Digital transformation is no longer optional.
The digital revolution didn’t start six months ago. It may have been accelerated with Covid-19, but it started long before the global pandemic upended our society. But this latest set of lockdowns has been particularly difficult for businesses without a digital strategy. People are struggling. And in this situation, it seems that many have found a scapegoat. But blaming Amazon today won’t help anyone. Blaming it for eating market share is like blaming
the A student for cheating when you fail the test. It is true, Amazon is swooping up business, and that’s a scary reality for retailers who thought they were immune to the various calls for change. But Amazon wasn’t born six months ago either. Their success isn’t a product of a lockdown. It is a product of the customer’s desire. What makes Amazon so powerful isn’t it’s fiscal positioning; it isn’t the repercussions of Covid-19. It isn’t the lack of or implementation of a GAFA tax. What makes Amazon so powerful is it’s business model coupled with its focus on customer-centricity. It’s that they have dared to think creatively, before the system started breaking down. That’s what makes them a threat.
And this is as much good news as it is bad news. The bad news is that the competitor is admirable. And that, compared to many, it has a head start. It’s been disrupting industries, and learning from those wins and failures, for 26 years. But there’s also some good news. The good news is that you too can learn from Amazon’s successes and mistakes. You too can dare to reimagine what business could be. You too can platform your business. You can harness the power of a marketplace model — focus on your customer’s needs and wants; pivot to get them the best and most competitive price; leverage the data to understand what they will want tomorrow, and get it for them. That’s the power and the agility needed to compete.
Winning in the Retail Revolution
Because today, Amazon is simply an agile competitor. A digital native that has positioned itself to answer the needs of the consumer; needs that — during this latest Covid-19 crisis — have accelerated to permanently change the face of retail.
But although consumer behavior has been impacted by the surge in e-commerce, the desire from buyers to shop locally, support their communities and continue to get the best products at the best price, hasn’t changed. If anything, it’s been reinforced. Now — today — it is critical to face the facts and react with vision. This isn’t an option anymore.
“We have to make French e-merchants even better than Amazon. Attacking Amazon because they offer a better service, I think it’s a bad fight,” Cédric O, French Secretary of state for the Digital Economy, said earlier this week
And I couldn’t agree more. And this isn’t only true for French merchants. It’s true for all businesses, worldwide. The businesses of main streets all over the world need to digitize. They need to arm themselves with the technology necessary to survive this latest wave of change. Channeling energy into hurting Amazon will not help the retailers who have yet to digitize. It won’t bring in new customers; it won’t help you ready yourself for the commerce of the future.
Meeting Consumer Expectations
Platforms that revolutionized the restaurant industry years ago — platforms like Epicery or Deliveroo — have revamped their efforts to allow local businesses to stay profitable. By on-boarding local restaurants, artisans and grocers to their platforms, they are positioning themselves as the one-stop-shop for everything local, even during a global pandemic. But what they are also doing is offering local businesses the opportunity to belong to the digital economy, which is today’s driving force. These platforms are offering a framework, but the transition is personal to each business. Local restaurants who hadn’t digitized their offerings are having to react quickly and with agility to keep their businesses running; think creatively by adapting their menus and creating DIY options for the lockdown; change their business models during a global crisis.
Though it’s a difficult position to be in, businesses are showing an inspiring level of creativity and resilience. On the flip side, for those who had adapted early on and whose digital options had been worked out in calmer times, pivoting to an all-digital offer is proving to be simply another avenue with which to reach their customers. Thanks to the platform business model, even small players can weather storms — and thrive through them — by having the agility to adapt quickly and match offers to demand. But foresight and a digital strategy are key. In this new world, reaction time is a precious commodity.
Platform pioneers who operate large marketplaces are also doing their part to support local vendors. Carrefour France recently announced it would open their marketplace to small and local companies that don’t have the capacity to launch an online sales channel in time for the second lockdown and Black Friday 2020. Overnight — without having to acquire the costs related to marketing or setting up their own online channels — local sellers gained access to Carrefour France’s client base of 15 million consumers. That’s the power of the platform model.
The past six months are proof of one thing: the old way of doing business is no longer reliable. Agility and digital transformation are crucial to staying in business and competing against the Amazons of the world. The biggest challenge today, for those who have yet to digitize, is to reimagine what business could be — not depend on the model of yesterday, but what needs to be done today. What customers expect today.
The Covid crisis has changed our norms. Consumer behavior and expectations have been altered forever. Convenience, transparency, trust — these are no longer optional. To do business with the consumer of today, businesses must offer them the goods and services that are in line with their new habits. To survive and thrive in the world of tomorrow, businesses big and small need to realign with their core purpose, their customers, and their goals and develop a digital strategy that can help thrust them into this creative new world.
