Like many fellow, proud last minute Holiday shoppers, my gift-buying stress has gone down dramatically as online shopping has gotten faster, more reliable, and if it is even possible more price competitive.
I am not alone. Holiday E-commerce continues to one of the great growth industries in the world, with sales growing 13.9% this year, to a record $79.4 billion. At this growth rate, within 5 years ecommerce will represent the majority of US holiday retail sales!
Great for the consumer, but troubling to say the least for all but the biggest online businesses, as the Amazons of the world build on their already dominant positions and put under severe threat everyone - offline, specialty, and smaller retailers - in their crushing paths.
Yes, smaller businesses need to either adapt to this new environment - learning from the strengths and exploiting the weaknesses of the Big Boys - or be steamrolled.
Just say no! Here are changes and initiatives that almost every business can set in motion right now to keep this from happening to them in 2016.
First, Understand and Speak to the “New Customer.” At Amazon senior executive meetings, Jeff Bezo's famously leaves one seat empty to represent the interests, wants, and needs of the customer.
Let’s speak to these customers as they are - for better or for worse entitled and empowered by endless inducements like detailed product specifications, price matching, and extensive, verified online reviews and testimonials.
And know that B2B customers too are fully conditioned with these expectations and that if we can't meet them, newer competitors will.
And we are going to recognize and accept that meeting these expectations will require us to offer far more Intrinsic Value with our products and services than we currently do.
This is especially true for service businesses - lawyers, accountants, web designers, consultants of all types - where much of the offering is “relational” and “perceived” and as such difficult to define and quantify.
Here is a quick and dirty way to do this quantifying and defining: Let’s benchmark the price, quality, and value of our Offerings against that offered by “freelancers” in our industry for comparable services.
Yes, doing so is scary - think of fields like web and graphic design decimated by overseas freelancers providing good quality service outcomes at seeming impossibly low rates.
But look, compare, and benchmark we must.
And as we do, we need to make one Big Change and one big choice:
The Big Change: Ruthless cost reduction and vigilance is the way we must live and work today (brought to you by Amazon, among many others). Given the vicious and unrelenting pricing pressures from everywhere and always, we have to be able to at least partially get to price competitiveness through cost competitiveness. It is what it is.
The Big Choice: We need to accept that we can’t compete, like an Amazon does, in multiple markets with multiple offerings, at commodtized prices.
Rather, we need to pursue niche and / or premium offerings that are - again - at least partially protected from price and feature competition.
Now this is where it gets really hard - more often than not what this entails is an acceptance of reduced volume and horror of horrors turning away paying customers if they are lower margin and not part of a longer term sustainable and strategic plan.
A tough road for sure, but the competition is only going to get tougher as the years roll on. So give your business a gift this Holiday Season and put these critical changes into motion today.
To an Awesome Holiday Season for You and Yours!
P.S. Click Here to register for my webinar on “Seven Things to Do” to Make 2016 Your Best Business Year Ever.