Archive for December, 2011

Up the Amazon Without A Paddle

Friday, December 16th, 2011

By Doug Stephens

The recent launch of Amazon’s price check app was greeted with everything from retailer outrage to government sabre rattling!  Some even called it evil!  Really? An app…evil?

In case you missed it, to commemorate the launch of the app, Amazon offered consumers up to $15.00 off their purchases if they used the app to price check items in local stores, before ultimately buying the same items on Amazon.  So, Amazon gets the pricing data and the sale, the consumer gets the discounts and the goods and the local retailers gets the pleasure of being the not-for-profit showroom. 

As you can imagine, this caused an uproar.  Retailers, industry associations and even a U.S. Senator joined the appeal for Amazon to halt the promotion.  Some felt Amazon was preying unnecessarily on brick and mortar retailers when they could least afford it – during the holiday sales run up.

Many cited Amazon’s “unfair advantage” on pricing.  I’ll grant you, the playing field isn’t perfectly level.  Amazon’s exclusion from having to charge sales tax makes it tough on their brick and mortar rivals but that isn’t exactly a new situation.  Online retailers have never been required to charge sales tax in states where they have no substantial physical presence.

If the only discernable difference between you and Amazon is the sales tax, you never had a chance in the first place.

Among the new rules of retail, there’s one that’s ironclad.  If your products, services and/or overall customer experience are not so substantially different from Amazon’s that you defy direct comparison, your life expectancy is limited.  And there’s no level of outrage,  complaining or Senatorial intervention that will change that.  In fact, Amazon won’t be your only worry – every competitor is potentially lethal when you lack any notable competitive differentiation.

And if you really don’t like Amazon’s price check app, brace yourself.  As smart phone sales continue to grow exponentially, more and more consumers are going to be wielding the likes of Google Shopper, Red Laser and a host of other apps aimed at directing consumers to the best possible price – and all other things being equal, they’ll take it.  The best retailers will focus relentlessly on ensuring that that all other things are in fact, NOT equal.

It’s just this simple:  Differentiate or die.

“I Don’t Use It But I Totally Get It”

Wednesday, December 7th, 2011

By Doug Stephens

One thing I hear very often from C-level leaders of companies when I’m presenting on the topic of social business is “I don’t use it, but I totally get it”.   They claim to understand the relevance of social networks and social media but simply choose not to use them.   They frequently cite a lack of time as their reason for not taking part personally, yet also claim to have a clear sense of how social media can be usefully deployed by their companies to engage consumers.  They don’t use it but they totally get it!

Of course only half of the statement is true.

Look at it this way; would your company hire a CMO who had never watched a television program? If your CFO had never constructed a budget, reviewed a P&L or read a balance sheet, would you have faith in them to manage the company’s finances?  Chances are we’d find this lack of core understanding simply unacceptable. Yet we somehow accept corporate leaders taking a pass on social business.  Why is that?

And what precisely is it that is diverting C-level attention away from what is arguably the most significant communication revolution since the printing press?  What level of email or voicemail proliferation is depriving them of the 5 minutes it takes to set up a Twitter profile, just to see what all the fuss is about?  Aren’t they even a little interested to see what their customers have to say about them on Facebook?  Shouldn’t they be?

The truth is the choice to opt out of social is just that — a choice.  And moreover, if it were any other aspect of the business that was being so openly ignored, we’d consider it negligent but because we call this “social” it’s somehow considered extra-curricular and optional.  It’s not considered an essential tool like finance, operations or human resources are.

Social business is not something that you read a book on and understand.  You have to make it a discipline.  You have to witness for yourself how connections are made, relationships are built and value is exchanged.  In order to get it, you have to do it.

The C-level leader of the future won’t be excused from social business.  At very least, a solid functional capability and understanding of social networks will be expected – no different than acumen in finance, marketing and supply chain management.  The use of social and professional networks both internally and externally will be as common as email is today.

The bottom line is that any corporate leader who claims that social business, media and networking “isn’t for them” is either coasting to retirement or running from their responsibilities.