When new parents bring newborns home, they set about baby-proofing the house. Outlet covers and baby gates are installed. Cleaning supplies are locked up. Retailers protecting their businesses go through a similar process, searching for potential dangers and implementing whatever measures they can to keep their businesses safe. Safe…and profitable. In a world where many retailers, including big names like Target and Walmart, are losing business to Amazon, creating an Amazon-proof plan to prevent or recover those losses is essential to a retailer’s success.
So how do you Amazon-proof your business? Let’s start by looking at a business that has successfully kept its profits from Amazon: Costco. Business Insider states that analysts labeled Costco Amazon-proof after a strong November, and the stock is on the rise. The Costco membership model and incentives that keep customers coming back include:
- Costco offers products that most customers need or prefer to buy in person, including food and gas.
- Costco locations include a food court, which serves as a draw to many shoppers. It is now one of the largest pizza chains in the US.
- Shoppers go with a list but frequently pick up impulse purchases, many times with large price tags.
- Costco keeps an eye on the future. Organic food options are expected to grow, gas margins are expected to become higher, and the company recently made the switch from a connection with American Express to Visa.
In addition, as noted in RetailDIVE, Costco benefits from having long-standing employee-friendly policies, paying employees well above minimum wage and providing excellent benefits.
However, Forbes challenges that rising membership in Amazon Prime, a service that delivers many Costco-type items straight to the buyers’ doors, could make Costco more susceptible to losing sales to Amazon. The author also raises the idea that aging Baby Boomers may not be interested in lugging large-quantity packing and that empty nesters no longer need the large quantity packages of supplies.
What can you learn from Costco that will help you make your business Amazon-proof?
- Look at your business model. What about your model is unique? What about your model is unique from Amazon?
- What do you or can you offer to your customers that they will appreciate and value that they cannot get from Amazon? Do you know? If you do not, watch them. Ask them.
- Once you learn what is unique about your model and what your customers appreciate that is not available through Amazon, use it. Market it in-store. Market it on your website and social media. Be sure your customers are aware.
- Learn from Costco’s employee-friendly policies. Happy team members reduce turnover and therefore reduce hiring and training costs. Keeping employees costs in-line helps you keep your prices reasonable.
- Keep an eye on the future. Keep an eye on your customers. And keep an eye on Amazon. What is happening in your industry? How is Amazon dealing with those changes? What can you do to add value for your customers that is unique from what Amazon can provide?
While creating a plan to Amazon-proof your business looks very different from buying and installing cabinet locks while baby-proofing, the impact is similar. Consider dangers and plan for the future so you can protect your business and your team from the threat of Amazon. Taking the time to think, strategize and plan will help you reduce losses. Remember to continually look to the future, adjusting your plan to changes in your industry and what your customer values that is unique from what Amazon offers.← Back to all articles