Tag Archives: amazon

Amazon’s Customer Strategy: New HQ Edition

At the beginning of the summer, I posited that Amazon bought Whole Foods not as part of a distribution or merchandising strategy but rather because they wanted to cater to the mass affluent consumer.

Now that Amazon has begun the great HQ2 competition, I’d like to take a moment to extend the mass affluent factor to geography.  In other words, where would Amazon build its second headquarters if they wanted to keep the mass affluent consumer in mind?

At first glance, this question seems irrelevant.  After all, Amazon already sprawls across this country with major offices in places like Newark, NJ and Grand Forks, ND.  Myriad distribution centers fill spaces in between.  They once got me a router the same day I ordered it in NYC from Kentucky.

That said, companies often relocate to get in touch with an audience or a workforce.  Many car manufacturers have design HQs in Southern California to take advantage of the region’s car culture.  GE recently announced a move of their headquarters from Fairfield, CT to Boston to attract workers interested in a more cosmopolitan environment (or maybe because GE likes Harvard better than Yale).

So where would Amazon put HQ2 if they wanted to immerse themselves in mass affluence given that they want to avoid the West Coast and such wealthy citadels as Silicon Valley, Santa Barbara and Palm Springs?

Don’t try to make it here

I’ll cross New York City and environs off the list first.   Continue reading

Amazon’s Customer Strategy

When Amazon bought Whole Foods for $13,7 billion, pundits and punters alike weighed in on what drove the acquisition: technology, distribution or as a shareholder value play.  I don’t know enough about the business to tell you which of these opinions–or others–comes closest to Amazon’s actual logic.

However, I’d like to speculate on a much simpler organizing thought: enveloping mass-affluent consumers.

Yes, this lot.  Again.

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Post Cold-War Retail

Every retail client I ever had doubled as a spy.

Wow.  Look at all those SKUs

That is, they all spent time mystery-shopping competitors to see what they had and how they did things.  My Sam’s Club clients, for instance, might have spent more time in Costco’s warehouses than their own with the result that their warehouses started to look like Costco’s.

For decades, a cold war-like situation held sway with retailers keeping tabs on each other and reacting quickly.  More recently, I’d argue that online retail, particularly that other Seattle-based retailer, has effectively ended the cold war and made it harder for bricks-and-mortar retailers to know what’s going on.

Witness the example of fidget cubes.  Where they came from and how they got there speak volumes to the new status quo in retail.

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I see your Dash Button and raise you a kiosk

Walmart recently announced a test in some Texas markets that suggest a new hedge against Amazon: in-store kiosks.

…the retailer is testing a new program that would allow customers to immediately place an online order for an item that isn’t in stock…

…Walmart CFO Brett Briggs unveiled the tests during an investor conference Wednesday, describing the system as an “endless aisle-type concept.”

Walmart being Walmart, this otherwise straightforward pilot could take on any number of overtones.  It doesn’t take too much imagination to wonder if the kiosk represents an initiative to reduce labor costs.  As a former contractor who worked on the Sam’s Club business, I can attest to their emphasis, which I think you could fairly call an obsession, on reducing costs of any kind.

However, I think the kiosk has another goal: countering Amazon’s Dash Button. Continue reading

The New Luxury Brands

In a recent post, I discussed what a marketers with brands made obsolete by technology should do.  In short, I suggested treating these brands like luxury brands.  Since “something you don’t actually need” works as a basic definition of luxury, I think it makes sense to use luxury marketing approaches for products that technology has displaced.  In fact, even the august New York Times has picked up on the idea that mobile phones alone have put the heat on less adaptable devices.

So what are some examples of these new luxury brands?  And how might they re-establish their relevance in today’s marketplace?  Let’s look at three examples:

1. Cheap watches

casio

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Get a Database and Get into the Game!

With the advent of cheaper computing and sharper tactics, CRM has risen from the ashes of the promises it made in the 1990s.  While many marketers once associated CRM with meager results and NASA-level costs, the approach’s full capabilities have come to the fore, with companies such as Amazon and Tesco serving as glittering examples of success.

And therein lies the problem: fledgling CRM marketers look at these paragons of customer focus and throw their hands up.  These marketers feel frustrated because their own systems, data, content, personnel or management can’t live up to the very best the industry has to offer.

Well, quit feeling sorry for yourself and try anyway.  Here’s how. Continue reading

The Unified Field Theory of Creepy

When marketers discuss using consumer data to drive content or offers in addressable communications such as email, apps or on-site messages, sooner or later the word “creepy” comes up.  Front-and-center stand such examples as the New York Times’s infamous “father learns of daughter’s pregnancy via direct mail” article.

However, even ordinary consumers in ordinary situations may feel that a marketer has violated some form of privacy when it reveals too much about what it knows in an email or SMS.

We all agree that we want to avoid creepiness, but I don’t think we marketers, as a group, have established a working definition of creepy.  While no one would deny the creepiness of the lubricant example above, would an offer for sports equipment or kitchenware have raised an eyebrow?  How can we create a standard for what kinds of data are off-limits?   Continue reading