K3’s exclusive research with Retail Gazette examined what retailers anticipate for the industry post pandemic. We found that 87% agree the future of bricks and mortar will be more digital while 89% also believe that it will be experience focused. And the experience that the consumer values more than any other is convenience and having the option to pay or shop in any way they please. In fact, a third would boycott a retailer for not offering the services they want to see in 2021.
While some retailers are only now just realising this, Amazon has been ahead of the curve for quite some time. Their recent success with their Amazon Go stores – where customers simply enter the store using an app and can shop on the fly without having to scan items or queue to pay for them at a till – clearly shows the high convenience, check-out free direction that the physical retail industry is heading towards.
We recently caught up with Sean Culey, Business Transformation Advisor and author of Transition Point: From Steam to the Singularity, to learn more about how Amazon forged the future for itself.
“It’s easier to invent the future than to predict it”
Founder Jeff Bezos posted the first job advertisement for Amazon (then called ‘Cadabra’) more than 25 years ago.
Perhaps the most interesting aspect of the advertisement was Bezos’ reference to Alan Kay’s quote that:
“It’s easier to invent the future than to predict it.”
The reference was far more than hollow words – he and the eCommerce giant quite literally made it their mission to invent the future of retail.
“Amazon centred it’s entire retail offering around the consumer and thought about how it can eliminate inconveniences for them,” said Sean.
“Other companies assume those inconveniences are just part of the consumer experience and it’s not their job to do anything about it.”
Indeed, Bezos and Amazon never forgot what truly matters – the customer.
Their cult-like obsession to become the most-customer-centric company on the planet manifests itself in a number of internal corporate practices – such as ensuring that every company meeting always has one empty chair to represent the consumer’s perspective on whatever decisions are being made.
The purpose behind this practice is clear – to ensure that its pledge to become customer-focused is much more than a symbolic gesture, and is embedded in everything they do, every day. Amazon never forgets that its sole purpose is to create and serve customers.
“Not only is it moving retail forwards, but it’s created a whole new business model”
Amazon’s placing of the customer at the forefront of its vision has been instrumental in its rise to glory. But the eCommerce giant didn’t stop there. It continues its path to eliminate as many consumer barriers and inconveniences as possible.
But while Amazon was forging the future, the rest of the world still hadn’t caught up. And knowing that they are unlikely to be able to match their innovation efforts, Amazon saw whole new business opportunities with providing access to these new consumer-convenience capabilities.
“Amazon is actually making whole new business models and selling their software, analytical tools, facial recognition technology in payments and so on,” explained Sean.
“Not only is it moving retail forwards, but it’s created a whole new business model in selling that tech to all of the other companies.
“Of course, the company that owns the customer interface is the one who collects the data, and so by controlling the interface Amazon is ensuring it gets access to that precious consumer information.
“It has a number of ways to leverage that investment, but ultimately, what Amazon wants to do is sell their solution so that it becomes the de facto norm.”
This presents a difficult conundrum for retailers because the more Amazon pushes cutting-edge technology that customers become accustomed to, the more they need to up the ante to retain their own consumers.
Yet, retail’s pace of change – particularly in relation to technology – has reached such dizzying speeds that even research facilities at universities are struggling to keep up.
“The traditional education model is simply not keeping up with the huge amounts of change“
“Google, Facebook and Amazon are all developing their own universities to teach the new skillsets they need to invent this future, poaching the very best professors from the top universities to come and work at their new corporate learning centres,” said Sean.
“To attract these academics, they are prepared to pay way above the salary that traditional learning institutions are willing to pay.
“This leaves the universities with professors who still can only teach the skills of the industrial age, not the digital ones.
“While they can talk about AI as a theoretical construct, the Amazon’s of the world are creating their very own real-world laboratory.
“The traditional educational model is simply not keeping up with the huge amounts of change.”
Lessons from Amazon
Amazon arguably created its own future in three key ways: by placing the customer at its heart; by progressing the industry forward and making its tech widely available; and by establishing its own universities so that it is ready for the future.
There are many lessons to be learnt from Amazon, but perhaps the most crucial one is that we are long past the point where one big change is going to revolutionise the industry every few years.
Today, retailers have so much tech and data to work with that the zeitgeist is really the pace of change, as opposed to any specific advancement.
What this critically underscores for retailers is quite simple: they can no longer sit idly by and wait for the next big development. They must adapt today to a new world of consumer-centric convenience, or they will fail.