How did Amazon catch everyone off guard?

Leonard Zell explains the problem jewellers face by the growing success of Amazon

Complacency by retailers in the US was the major factor why Amazon’s success caught the entire retail industry off guard. Three of our largest retailers in the US have paid a steep price.

Macys JC Penny have closed hundreds of stores and Sears’ future is in doubt. The Limited, one of the largest moderately priced ladies clothing store chains has closed a large percentage of their stores and may not survive because on June 20, Amazon added another exclusive service for their Prime members.

They can pick at least three items of clothing, and up to 15, from more than a million Amazon Fashion options, including clothes, shoes and accessories for kids and adults, to fill your Prime Wardrobe box with no upfront cost. Brands available include Calvin Klein, Levi’s, Adidas, Theory, Timex, Lacoste and more. Once the Amazon Prime Wardrobe box arrives, you can try on the clothes for up to seven days. Then you either schedule a free pick-up or drop the resealable box with its pre-paid shipping label at a nearby UPS to return whatever you don’t want.

Keep three or four items from the box and get 10 percent off everything, or keep five or more for 20 percent off. You only pay for what you keep, with no charge up front. Amazon Prime Wardrobe is free for Prime members with no extra fees. The UK’s 8 million Prime members contributed to a UK gross merchandise value for Amazon of nearly £20.3 billion in 2016, up 22% over 2015 and equivalent to approximately 40% of UK ecommerce sales for the year. About 77% of ecommerce-using UK adults surveyed by PricewaterhouseCoopers in September 2016 said Amazon had affected their shopping behavior.

I am writing this because it was obvious to Jeff Bezos, (CEO of Amazon) the retail industry in the US and the UK has done business the same way for too long. It was only a matter of time before he would enter the retail market and eat their lunch. He saw the opening and he walked right in. Do not let this happen to you. If you are complacent and resistant to change, it will. I am writing this article to warn you jewellers that complacency was the major factor for failures of retail jewellers in the US.

However, if you keep an open mind and always open to new ideas I will tell you how to succeed. In fact, if you take my suggestions you will end up doing more business then before. First you must understand you are competing against a retail robot. Amazon has no personality. Observe your salespeople. Do they? Are your customers greeted like a friend with a smile and enthusiasm? If you say yes I urge you to observe them again and I am sure you will see there is room for improvement.

I have conducted lectures for numerous jewellery organisations in large groups and when I asked, “When was the last time you have entered any retail store including jewellers and were greeted by a salesperson with a smile and enthusiasm?” The most hands raised were three. Then when I said, “What bout your store?” They saw the light. Will you?

This feature first appeared in the September 2017 issue of Hotel Owner  

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