The news of Amazon's acquisition of Whole Foods sent shock waves through the retail industry. On the heels of launching Amazon Go, why would Amazon immediately make another huge bet on its brick and mortar strategy?
What Amazon understands is that winning in retail is not about dominating in one space or another. It's about understanding the entire customer lifecycle and continually finding new ways to serve customers wherever they shop. If there's one company that has mastered the art of capitalizing on customer information, it's Amazon.
For the past 10 years, personalization has largely taken place in e-commerce applications, with Amazon leading the way. But, today it's everywhere.
At the heart of personalization is understanding what the most relevant item and brand is for the right consumer, at the right price, at the right time, but also in the right channel. Amazon knows that people shop differently online than they do offline, and the only way to succeed is to understand consumers in both realms. We are on the verge of a disruptive inflection point in our industry, where online and offline converge like never before. It's becoming ever more critical to take the broadest view possible of how consumers engage with our brands. If we don't think about what the customer is doing at every point in the path to purchase, we're missing out on key opportunities.
So, how do the rest of us reach the same level of maturity in customer-centric retailing? There are five key points that we need to keep in mind as we push forward.
- Start with analytics - no longer a nice-to-have. It has to start with a solid foundation of analytics, and this is no longer a competitive advantage, but quickly becoming table stakes. To survive in the next 10 years, every retailer will need an agile analytics system that allows them to understand consumer behaviour at a very granular and dynamic level.
- Invest in new skills today. A customer-focused, personalized strategy requires new skills, new processes and new ways of thinking. The time to invest in new skills through training and hiring is now. The field will only get more competitive and the pace of change will only accelerate.
- Don't try to be perfect. It can be tempting to dive in and do everything immediately be all things to all consumers, transform the business from top to bottom but that's often a path to failure. While it's critical to have a bold long-term vision, most successful initiatives are based on a focused and phased plan with achievable short, mid, and long-term milestones. Make a plan, stick to it, see what happens, adjust as needed and try again. Treat this as an opportunity to learn, to make mistakes and to develop a skillset within your organization. Speed of trial, learning, insight and adjustment will be the competitive advantage of the future.
- Accept this is the new normal.Amazon does personalization as a matter of course. It's not an initiative for them, it's just how they work, and that's how the rest of us need to approach it. Personalization can‚Äôt be on our list of 2018 Imperatives. We all need to acknowledge this is how we're going to run our business from now on. Change is continuous. We need to boldly declare that we plan to keep up.
- Be honest about existing capabilities and seek help.Not only do we need to invest in building capabilities, we also need to think hard about our ability to take on a business transformation while still running the business. Is it realistic to operate in two different worlds during the transformation? This requires an honest assessment of what you can do on your own, and where you might need to engage an outside partner to get it done. Trying to catch up to and compete with Amazon is going to be tough enough, think hard about who to partner with to help you do it.
It's one of the most dramatic and exciting times to be in retail. Personalization has been on the horizon for the past 20 years the moment of truth has arrived and the pace is daunting. But, the promise and potential for growth through personalization is worth the challenge. It's time to jump in.