The New School of Retail: How Amazon and Zappos are Changing the Landscape
May 2 2011 by ChiefExecutive.net
Most manufacturing businesses go by the mantra, ‘make it lean.’ But are those guiding words really the end-all be-all of manufacturing? Both Amazon and its recently acquired Zappos would say no. Michael Dart and Robin Lewis argue in BusinessWeek that business is no longer just about finding a good value, because good values are now the norm and the price of entry into today’s marketplace. So what do companies need to do? Create special customer experiences and maintain control of the value chain.
Both Amazon and Zappos are successful online retailers and have captured a large share of the market without following convention business rules. Zappos’ focus is on the customer service experience, which creates and maintains happy customers that keep coming back. Zappos has the ‘addictive’ experience that creates strong customer loyalty.
Dart and Lewis see the sale process as a circle and the retailer must control all points in the value chain. Consumers desire your product, pause to consume it, and then if all is done correctly they come back for more. To maintain this you need:
- Collaboration: silos are the enemy, break them down
- Decision-making: making quick decisions means the ability to deliver the products that consumers want, when they want them
- Efficiency: #1 and #2 should lead to #3