Square-Off: Is Amazon Good for Business?
Amazon is cool, right? Who wants to spend hours holiday shopping in a mall? For that matter, who wants to sift through a bunch of different websites when you can get everything you want from just one? Either way, who wants to pay more for the privilege of not buying through Amazon? Rhetorical questions all? Maybe. But before you get back to your gift list, here are some other questions to consider: Do you know anyone whose job or business got trampled by the raging online behemoth? What m ..
Amazon is good for business, good for brands, and good for customers of goods and services.
Amazon is all about making people’s lives easier. There are three dimensions of ease: ease of choice, ease of use, and ease of mind. Amazon’s creativity and understanding of people’s needs, problems, and occasions hits on all three.
We’re able to choose goods and services across categories; we find the site easy to navigate and can get help at any moment; and we trust Amazon to stand behind what it sells, putting our minds at ease.
Amazon is also upending business models, in a good way. It is a compelling driver of needed change across categories and industries. Some people see the world changing and react to it. A few see the potential for change that others fail to see and create the change. Amazon is a change creator.
Some perspective: The wide availability of television was a creative, disruptive, life-changing force. Television changed the way products were advertised. It changed the way people were entertained. It changed the way news was provided. It brought families together in a way different from sitting around the dinner table. It opened up a new way of viewing the world, changed our perceptions of our place in that world, and allowed us to see history as it was happening.
Amazon is a similar revolutionary force. It is changing the way we shop, our ideas about privacy, and our willingness to trust in a relationship where we do not see or interact with a third-party partner.
It offers us conveniences and options and varieties of products and services. Amazon has given us the gift of time. We can find that unique product without spending time searching in stores. It is changing industries in which it sources goods. It is changing the idea of retail. Amazon gives small brands and unknown brands a place to communicate.
It is changing the logistics of delivery. It is experimenting with different pricing strategies for goods and services. It is not just investing in the online world of cloud storage and computing and its website mall. At the same time Amazon is investing in new kinds of brick-and-mortar retail.
Amazon is spurring creativity in a number of categories. It is forcing businesses to face the facts of change, ditch cultures of complacency, and jettison the idea that what used to work yesterday will still work today. And Amazon is good for customers by forcing marketers to become more relevant to changing customer needs.
For example, Amazon has forced department stores and other retail outlets to re-examine the way they sell. Retail is now evolving to the development of relevant, differentiated experiences instead of being a building with lots of branded goods. Amazon began the system of having customers rate the books they read, which has morphed into sites like TripAdvisor and Yelp. Amazon used its data on selections and ratings to personalize recommendations. Amazon provided other choices for consideration with its “people who bought this also bought….”
The so-called Amazon Effect is spurring businesses to reevaluate and recalibrate business models that may be or will soon be outmoded.
Walmart is focusing less on opening new stores and more on improving its online offerings. CVS plans to buy Aetna to create a bulwark against a potential Amazon entry into medical services and prescriptions. Campbell Soup is implementing fresh soup delivery to help resuscitate its iconic brand in a world that no longer perceives canned and condensed as “good food.”
Amazon is driving companies such as UPS and the USPS to be more flexible about deliveries. And, in many U.S. cities, Amazon is working with 7-11 to install lockers at the convenience stores for people who don’t live where there’s front-door staff or who don’t want packages sitting on the front porch.
Amazon is more than an online retailer. It’s a powerful force for change. There will always be detractors of any force that pushes us to alter the way we navigate our lives. From a business perspective, the brands we use are now motivated to change for the better. From a customer perspective, Amazon will make our lives easier and better.
Larry Light is CEO of Arcature, a marketing consulting firm. He was global chief marketing officer for McDonald’s from 2002 to 2005 and chief brands officer of InterContinental Hotels Group from 2010 to 2014.