Playing the yes/no game with Amazon

Have you ever listened to one of those radio phone-in show competitions where listeners call in and could win a prize if they can answer a series of questions without saying yes or no?

They’re pretty funny.

All too often, the presenter explains the rules, says “ok let’s begin” and then kicks off with a question like “are you ready to get started?”

The nervous contestant is caught off guard – even though the game has begun they are eager to say the right thing … “yes, I am” they reply.

Thanks for your time, caller. Next contestant, please.

I think about this scenario whenever I read someone arguing there’s no future for brick and mortar stores; usually the argument is that stores are costly and you can’t compete with Amazon if your cost base is dragging you down.

Thanks for your time, author. Next opinion, please.

The problem with the idea that you have to ditch your expensive stores and go down the pureplay online route is that it contains just enough sense to appear sensible. But it really only makes sense if you choose to ignore a few realities. One of those realities is that in the online space no one can hear you scream above the noise Amazon makes while it goes about its daily business.

Let’s not beat about the bush here – you cannot compete with Amazon. Unless you are Alibaba, of course. And if you’re reading this, Mr Ma, I’d just like to say I’m a huge fan of all your achievements. Really big fan. The best.

Amazon will always be bigger than you. It will always be more efficient than you. You will never come close to spending the kind of money Amazon spends on advertising, technology, and logistics.

If you want to out-gun Amazon you’ll have to start playing to your strengths – and looking for some weaknesses in the Amazonian armour. Otherwise you’re just playing to Amazon’s strengths, aren’t you?

What might those strengths be?

Well, maybe you sell specialist products to a niche audience. An audience for whom a trusted relationship with an expert retailer is an important consideration – more important than saving a few £s on the purchase price or shaving a day or two off delivery times.

Or maybe you have stores – actual shops made from good old bricks and mortar.

Right now, Amazon doesn’t have many of those, now does it?

However, “we got shops” isn’t a strategy on its own. You’re going to have to work on that a little – polish it, refine it.

For the most part, shops tend to be in areas where there are people. People want – or sometimes even need – a wide range of things, and maybe your shop can be part of helping them get what they want. Maybe that’s the start of your strategy.

You can’t be Amazon. Why not be something Amazon can’t?

Here’s a bold prediction – Amazon will never be part of your local community in the way independent stores have traditionally been.

But no one wants dusty old traditional shops, you may be thinking. OK, well that’s a bit of a generalisation about local shops, but I get your point and I tend to agree with it.

Like a lot of people, there’s a newsagent close to where I live. I’ve been in this neighbourhood for more than 15 years. I can remember how depressing that shop first seemed to me; there were boxes of toys on a shelf behind the counter that had been there so long the colours were fading from the packaging. Other than that there were lots of newspapers, magazines, sweets, chocolates and, of course, cigarettes.

Today, there’s no shelf of faded, forgotten toys. There are fewer newspapers and magazines too. The sweets and chocolates are still on sale, as are the tobacco-related items.

But the biggest visible change when you walk in is the bank of parcel lockers. You can also send and receive parcels via one of two parcel networks, as well as get your dry cleaning taken care of. I think you can also hire a carpet cleaning machine from them.

Whatever the reason, people now visit that shop to do something other than make a purchase.

And here’s another reality … if you haven’t got a physical presence you can’t take advantage of footfall.

 

A version of this article first appeared on the Parcelly Thought Leadership blog.