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How to Beat Amazon

vs amazon

With Sport Chalet closing and even Walmart showing losses, Amazon is the clear competitor to beat.

So far no one has a clear winning strategy:  click and mortar, brick and mortar, online, no one is safe when it comes to retail.  However, there are some that are surviving and thriving by offering something online purchasing cannot match, a visceral shopping experience.

Retailers have to make their stores into a destination.  Funky decoration, unique customer experience, seminars/lectures, a sense of community, etc.  This is really where the personality of the business (the “brand”) is shown.

One example is The Last Bookstore, a bookstore in Los Angeles.   The photos below show a stark difference from Barnes & Nobles.  These aren’t Bookstore temporary holiday decorations but long-term attractions that draw crowds.

This piece invokes a sense of fantasy and imagination that some fictional works brings to readers.

Like other bookstores, there are stationery/craft goods for sale.  The wheel doesn’t have to be reinvented…just tweaked to a unique way.

This “nonperforming” space, in the traditional retail paradigm, would be scrapped in conventional stores.  The book tunnel is a big draw for shoppers.

The current version of The Last Bookstore is actually its 3rd stage.  First opened in 2005 in a loft, it quickly expanded into the former Citizens National Bank’s 22,0000 sq. ft. downtown space (an insane space for any retailer let alone an independent one).

Experiential shopping obviously has a bunch of challenges; you may need a unique space, maintenance of store fixtures, uniquely trained staff, only local reach (for the time being which I will get into at the bottom of the article), possible higher insurance, and other differentiating factors which all can result in tighter margins.  However, having a challenging strategy is better than having none at all.

Implementation

  • The Last Bookstore:  They are known as the largest independent bookstore in Los Angeles.  They have a crazy interior.  They also sell used books for $1.  This price point is important because buying a used book online will not be cheaper after shipping is factored in.  Also, books offer a fundamentally different tactile experience from eBooks.  So customers walk in to check it out.  They wander the vast selection, and take pictures of the funky decor.  They  wander through the store they touch items, a psychological factor in sales.
    • Now they’re are not just a consumer.  Now they’re a consumer at a super hip, independent, small business.  They feel good about themselves.  They tweet to their friends about it.  Repeat.
  • Clothing Retailers:  Using my client Maitri Yoga as an example, a yoga clothing retailer; don’t sell too many existing/famous brands.  About 40-60 (name/unknown) mix.  You’re not going to be able to compete on price and there are also covenants on discount pricing for name brands.  People already know the sizing for these brands so they will use your store as a showroom (like Best Buy used to be before offering price matching).  Sizing and other factors are not uniform throughout clothing, so the product needs to be felt and tried on.  Therefore you have to offer goods that aren’t known and aren’t sold on Amazon.  They come in for a Prana top but see a new unknown brand.  Now you’re the hip store that sells up and coming brands that aren’t offered on Amazon.  In order to do this, you and your purchaser/procurement officer has to know market trends, know which brands have good quality, nice design, etc.

The work doesn’t stop there.  The store has to be laid out in a manner that draws in the customer.  New items in the front.  Focal decor near the front and in the center/back.  You’re going to have to go to estate sales, yard sales, furniture store liquidation sales, etc. to purchase furniture, decorations, accent pieces that fit the company’s brand.

Additionally, you have to build community engagement.  If you’re a Williams Sonoma, you have to offer cooking events.  If you’re a Nike, you have run Clubs to build engagement. Potential customers will come in for the event but may purchase something that caught their eye.  The costs for holding public relations activities such as events can grow beyond the return on investment so keep an eye on public awareness expenses.

The good news for small business owners is that the unique, boutique atmosphere each independent retailer has cannot easily be matched by larger companies.

Every industry is different so I would have to consult with you on an individual basis; then look at industry & market trends, the culture of the brand, the company’s financials (look at its performing items and overhead), etc.  This is all under my strategy consulting services.

 

Coachella and Advertising

Sunset

Of course almost every company needs to advertise.  But where?  Targeted advertising is most effective.  So just put a sign at where your market hangs out (what’s “market”?  check out my article on some commonly mistaken business terms)?  You can put up a sign but it comes off as inauthentic and lazy.  You have to deliver the brand message/concept in a way that will be received.

H&M is sponsoring Coachella for its seventh year.  Premier music festivals can make over $1 million by selling stage-naming rights to corporate sponsors.  However, other businesses are getting on the ground-level and making for a more interactive experience.  One way is experiential marketing / promotional events:  Levi Jeans’ Pool Party at Coachella.  Yeah, you know it’s commercial but it still creates a positive association with the brand.  Yes, the same positive association used on all animals to create habits.  Habits = sales, if ingrained deeply enough.

Where do you find where your market hangs out?  Google industry trade shows, magazine, clubs, etc.  Selling knitting needles?  Find influential people on Pinterest and send them a sample.  Opening a bakery?  Go get a booth at the local farmer’s market and get to know those in the neighborhood.  In Supermensch: The Legend of Shep Gordon, Shep sold out Alice Cooper’s show in London by having a billboard truck advertising Cooper’s show breakdown in Piccadilly Circus (one of London’s busiest roadways) during rush hour traffic.  So for hours people helplessly saw in person and on the news, Cooper’s ad while stuck in traffic for pennies on the dollar!!!  There are only as many ways to promote your business as the imagination allows.

So don’t just spend a ton of money and blow it into the wind.  Do a ton of research and then inject that into a targeted promotion as part of an overall marketing campaign strategy.

Competitive advantage and coffee

Competitive advantage and coffee at one 7-Eleven location

When you are asked what your competitive advantage is, what do you think?  Processes?  Patents/Intellectual property?  Cutting-edge algorithms and data analytics? Those are all valid ways to have a leg-up on your competition.  However, not all competitive advantages are high-tech and modern.  Some are old-school.  Tried-and-true methods for (in this case) building customer loyalty/satisfaction/based and making the sale.  There are many areas in which a company can improve effectiveness, but that is for another post.

One of 7-Eleven’s competitive advantages allows one location to sell over 2,500 cups of coffee a day.  2,500 cups. A. Day.  This location sells the most coffee out of any other 7-Eleven location in the world.  Think of every single 7-Eleven you’ve ever driven by in your life.  This 7-Eleven sells more coffee than that one.

How?

Store manager Delores Bisagni.  Delores, who is on kidney dialysis, has been working at her location in Shirley, NY 7-Eleven for 18 years.  Delores’s secret is knowing virtually every single customer’s name.  That’s it.  You go there, and she greets you (by name if you’re a regular) sometimes with a hug, you get your coffee and get on your way.  If you’re new, she greets you and asks your name.  Over time, she’ll remember you, make you feel welcome for coming to her store, and causes you to come back.  That is it!!!  That is how she sells 2,500 cups of coffee a day!  No traffic flow algorithm, CRM software, etc.

Delores might have profound name memorization skills and whatnot.  However, I believe it’s more that she cares about her customers.  “Care for our customers” is a slogan most businesses don’t understand and/or believe in.  However, if you can truly understand and apply that concept, I think it will help you.  Maybe not make you the #1 seller in your field, but will help you nonetheless. That is why I offer my services at a deep discount, give free editing for the life of your business, often give free advice, will work with clients that can’t pay right away, and follow up on how your start-up is doing.  So far, it’s been working very well!

RedBull Flugtag, marketing, and branding

Your Startup Guru case study - Redbull Flugtag

The RedBull Flugtag is an entertaining spectacle and a genius public relations event all designed with its branding in mind.

Last weekend I attended the RedBull Flugtag in Long Beach.  It was an entertaining spectacle with lots of energy and a massive audience.  The highlight of the event?  To watch little more than shoddily made objects fall into the harbor.

Would such an audience turnout for out for an event held by, say Lipton Tea?  Imagine the Lipton Flugtag.  Do you think hundreds of people would sign up to spend many hours to build something that will last for seconds in front of tens of thousands of people?  If Lipton sponsored such an event, do you think tens of thousands of people will even show up?

This is because the event (or more accurately) public relations event, is dependent on the brand image of the brand (i.e. RedBull) is maintaining (or pursuing if the brand is trying to reposition itself).  People associate RedBull with action, irreverence, fun.  Lipton?  Not quite as much.  However, Lipton has market awareness strengths they can flex that RedBull is ill-fitted for.

How you advertise, where you advertise, the contents of your advertisement is highly contingent on your brand image.

Pop quiz:  What is the difference between marketing and public relations?

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