Ugh, Amazon is back in the news.
Now we’re all hearing the repeated loop of rhetoric about how Amazon is destroying the economy, killing retail, and getting a free pass.
If retail is dying, why is Amazon successful?
I’ve blathered on enough in other posts about how the responsibility for the collapse of brick and mortar retailers is entirely at the feet of those in charge of the retailers themselves, whether they’re the corporate raiders who bought up all the competitors, or the fat cat non-shoppers who sit on the board of directors and are only focused on quarterly reporting and not on the long term strategies.
Plain and simple, retailers don’t listen to customers. The proof?
Customers are still buying, just not from you.
So let me give you a little insight into your dedicated and loyal customers, who you are relying on to see you through tough times while you work to grow your audience with messaging that is meaningless, and new approaches that have no real connection to your audience.
I had worked with a very unique retailer that had been around for generations, and evoked a sense of style, luxury, cache, and nostalgia at the mention of the name. Even as the management changed, and the approach to providing the unique, high quality products and services they were known for, their customers clung to the brand identity and dedication.
But the company was struggling, even while the brand wasn’t. They spoke with us, consulted with us, but decided to commit only when the rent came due. It was too late. You cannot save a 75 year old company in a month. The company closed, and an era ended. It was heartbreaking.
Brand Loyal Customers
Recently I was at a local little league game, which offers the chance to take part in wholly unrelated discussions with parents of the kids, as they discuss the regular aspects of their lives and interests. The mention of the retailer came up. One of the mom’s had driven by the location and was shocked, SHOCKED to see the building had been knocked down. She was wondering if they were redoing the building and the store, but hadn’t read anything about it. Another mom chimed in and said the property was sold, and that the company had gone out of business. They were horrified, saddened, and the conversation quickly turned to a trip down memory lane, complete with inter-generational experiences, memories, and just a wonderful tribute to a once ideal brand. It was a story that marketers dream of. A brand so embedded with family traditions that it’s almost part of the family, across seasons and years.
But it went out of business.
Having worked with the company in what would turn out to be the final months, I learned a great deal about them, their customers, and their business practices. The company looked nothing like the brand, and despite still promoting the same stories, it simply did not live up to it’s history. A change in product lines, offerings, services, a lack of negotiation, a failure of business to develop partnerships, a reliance on old reputation with suppliers that strained them beyond solvency … yet the brand persisted, even as the company didn’t.
I joined the conversation with the moms. I asked them more about their dealings with the company, what they liked, didn’t, what had changed. It was confirmation of the recommendations I had provided the brand. I then asked what I felt was a key question, as a marketer.
If you adored and respected this company so much, why did you stop shopping there?
At that moment I realized, by looks and gasps, that I was not part of their clique. Their backs straightened, their necks instantly contorted to be at once pulled back, tilted slightly, and turned to the side as their eyes grew in horror and disgust.
“I didn’t,” the first mom hissed.
In that moment I was overtaken by the clique, and my marketer, professional hat fell off, and my clique-averse bandanna went on.
“Oh,” I answered, “because the company closed 5 years ago.”
They turned away, excluding me from that, and likely all future discussions.
The point is, they didn’t know the company had gone out of business. For over 5 years. They thought, probably honestly believed, that they were still active customers of the business. Of course they weren’t, but they didn’t even realize it. And these were customers who grew up on the brand.
Marketing is more than branding. It’s communicating with your customers, giving them what they want, what you say you’re giving them (via your brand) and listening to what they need.
So now we’re back to Amazon.
Yes, the business above blamed part of their downfall on Amazon, and on the recession, and on big box stores. None of those existed when their business came into being, and none of them posed a threat that competed with their core business. And still …
The business began to compete with them. Why?
Their products and offerings became indistinguishable from the others, but their cost was higher. they lost their edge, and had it not been for their brand loyalty, with their customers and their suppliers, would have been out of business 10 years prior.
They ran their business into the ground by not serving their customers. They had a competitive edge, but ignored it, and ignored their audience. Just as JC Penney did. Just as Macy’s did. Just as malls did.
It’s way easier to blame Amazon, though. Since, you know, it appeared overnight without warning and killed retail, right? I mean, if only we had an inkling of it coming, say, 25 years ago when it started selling books and we had a single market place where we could see how it drew customers from, say, brick and mortar retailers (and, if only we had an inkling how big book stores had an impact on small independent bookstores to predict the impact and identify the value add). If only we could see it expanding into other areas through delivery and offering small business owners an opportunity to sell on a large marketplace. If only …
But no, that would require us to pay attention, to understand our audience, industry, trends. It would require us to be accountable.
What is the Amazon Brand?
Books? Trinkets? Clothes? Deals? Delivery? Original Content? Publishing?
It was, but it’s not sitting on that. The largest component of Amazon’s business is cloud services. They cross over to their brand business with products like Dash, Alexa, Kindle, but they’re paying attention to their audience, their customers, industries, and trends.
Will your customers still think they’re your customers after you’ve gone out of business?