In case you missed the holiday shopping season post-mortems, a trend away from brick and mortar purchases was a dark spot for many retailers. I envision lots of non-retail industry CEOs sitting around, rubbing their holiday-enhanced bellies, and chuckling: “Glad I’m not a retailer. I’d hate to be competing with Amazon.”
But here’s the rub, executives. You are competing with Amazon — whether or not you are in retail.
In pursuit of the perfect shopping experience — low prices, no lines, in-stock merchandise, no surly employees — Amazon is reducing the friction of being a customer. And it’s got people thinking: What if it were as easy to book flights from commercial airlines as it is to buy from Amazon? What if it were as easy to change service plans with a telecom provider? “I’d buy my gas from Amazon,” said the CEO of one of Silicon Valley’s most successful public companies whom I met recently.
And if you think this sounds ridiculous, let me remind you that Amazon, once considered just a mammoth online book seller, is now a leading player in cloud computing; it’s getting into logistics and autonomous package delivery. Oh, and watch out cable TV. Part of the reason Amazon is (or will be) so successful in penetrating new markets is its ability to reduce customer friction.
The purpose of a company, according to the late management guru Peter Drucker, is to create customers. Friction — such as that caused by a product that’s badly designed, or poorly manufactured, or deceptively marketed — kills customer creation. It prompts existing customers to stop buying, and dissuades prospects from buying in the first place.
By aiming for a frictionless customer experience, Amazon is becoming the über customer creator — the über business — and is competing with us all…. After all, if the next step is buying gas at Amazon, why not automobiles? Why not enterprise software (my industry)? Ultimately, why not [Insert Your Company’s Products and Services Here]?”
So, dear Executive, if you’re not reducing the friction involved in your customers’ experience — then Amazon may just do it for you.
Photo credit: Sweetie187