3 Strategies You Should Steal from Amazon's Playbook
As we covered on PetBusiness.com last week, Amazon has made a clear declaration that it wants a bigger piece of the pet care market and has a wealth of resources to put toward accomplishing that goal. Interestingly, some of the strategies that Amazon intends to use to accomplish this growth look like they came right out of a typical independent pet specialty retailer's playbook—maintaining a well-curated selection of high-quality products, participating in cooperative advertising with vendors, personalizing marketing efforts for customers' pets and, most importantly, building relationships with pet owners by serving as a reliable source for information about animal care.
Well, turnabout is fair play. So, while Amazon is attempting to leverage some of the very same competitive strengths that have served brick-and-mortar pet stores well over the years, traditional retailers should learn a lesson or two from Amazon's success and be prepared to put those lessons into practice for their own businesses. With this in mind, here are three key strategies that pet specialty stores can coopt from the internet retail giant:
1. Invest in Success
Until fairly recently, much was made in the media about the fact that Amazon, for all its incredible sales growth, did not turn a profit. But unlike other internet retailers—particularly one that pet stores are all too familiar with—Amazon's lack of profitability was not the result of trading on extremely low or nonexistent margins for the sake of gaining market share; instead, the company chose to keep investing in improving and growing its operations. That is exactly what has made Amazon such a dangerous competitor today.
There is much that pet retailers can learn from this approach. Of course, when your livelihood is directly tied to your business' bottom line performance—as is the case for most independent pet store owners—you can't just throw profitability out the window. Still, it is vital that you continuously look for opportunities to make smart investments in your business. This applies not only to when sales are up, but also when they soften. In fact, I contend that investing in your store is even more important when times get tough. After all, if your response to a decline in sales is to simply offset it by removing cost, what are you really positioning yourself for in the long run?
2. Be Bold
Amazon did not get where it is today by playing it safe. As company representatives explained in their presentation at last month's Pet Industry Leadership Conference (PILC), Amazon's strategy when formulating new initiatives is to aim at fulfilling consumer needs or wants, regardless of how impossible that might seem on the surface. Then the company reverse engineers a way to accomplish these lofty goals. This is the approach that has enabled the company to offer services such as free two-day and even same delivery for millions of products—something that was unimaginable not too long ago.
The lesson here for traditional pet stores is simply this: do not limit your aspirations by getting hung up right away on how you will accomplish them. It may take a lot of time and effort to come up with the answer to how you will achieve your goals. In some cases, reaching them may be downright impossible—at least right now. However, focusing practical concerns from the start will only serve to stifle your imagination, and your business will never be more than it is today.
3. Fail Quickly
Going hand in hand with Amazon's commitment to being bold with its initiatives is the fact that it does not fear failure. However, it is important that failure is accomplished quickly. This was illustrated during the company's presentation at the leadership conference using the example of the Fire Phone—one of Amazon's few high-profile missteps. And while such failures seem few and far between from the outside, that is likely because the company is adept at cutting bait on dead-end programs.
This is an approach that seems simple but can be quite difficult to practice consistently. Nobody wants to throw good money after bad, but it can often be tough to give up on something that you've invested in heavily. The key is in being able to accurately analyze new initiatives and quickly identify whether they are going through growing pains or death throes. Understanding the difference is vital, as taking too long to fail on a small scale could drag down the rest of your business.