You think retail is changing?
Here’s a strategy to Coexist with Amazon. but first, take a look at these facts:
Amazon is moving into retail in a big way.
Amazon will be successful and their success will be big. They have the financial resources and the platform to make it work.
They will be integrating Wine, Spirits and Beer into their online and physical store operations. This has already begun and by the end of 2020 it should be in full production.
Amazon Expands Against Alcohol Sellers
Amazon has its sights on the national three-tier system of alcohol distribution, claiming cities nationwide while seeking to secure expert beverage law lobbyists in D.C. See what Amazon is doing.
Look at the chart below. It depicts what has happened to retailers’ stock that have been in Amazon’s path.
When Amazon comes to town, big brands and local retailers know they’re in for the fight of their lives—and with one-click, 1-hour wine delivery services available for Prime Now customers in major cities across the nation, it’s only a matter of time before Amazon’s bevy of beverage law lobbyists and $44 million lobbying expenditures expand free, $50-minimum, 1-hour wine deliveries to all 50 states. Prime Now customers in cities including Austin, Manhattan, Chicago, Sacramento, Los Angeles, San Diego, and soon San Francisco now enjoy buying their wine online from home, leaving retailers, distributors, and producers alike uncertain about the future of their businesses.
As reported by CNBC and Feedvisor, “74% of consumers of go to Amazon when they’re ready to buy something. That should be keeping retailers up at night.” With over 100 million loyal Prime members paying $12.99/mo for free same-day deliveries, exclusive discounts at Whole Foods grocery stores, and free access to Prime Video and Prime Music services, the online retail giant now seeks to expand its 1-hour alcohol delivery service and reportedly plans to launch a new grocery chain. Though an oft-cited source of business decline amongst its retail competitors and an undeniable source of immediate stock devaluation, the Amazon effect isn’t wholly responsible for the death of Sears, Toys-R-Us, and other 20th century titans.
Forbes reports, “Amazon isn’t to blame for the demise of Sears or other brick and mortar stores – it’s an overall failure of retailers to change and adapt their business as customers’ needs and tastes change, as well as repeatedly disappointing their customers. Amazon is just an easy scapegoat.”
At least one 20th century retail giant fended off the Amazon effect and outright reversed it, effectively surfing an Amazon wave out of dire straits and into 21st century success. As reported by Inc., “Amazon almost killed Best Buy. Then, Best Buy did something completely brilliant”—by focusing on people before profits, turning their weakness against Amazon into an advantage, and building sales relationships instead of just making sales.
Amazon is continuing to innovate in other areas as well. They are now offering “delivery to your car” with Amazon Key. It’s not likely that alcoholic beverages will be delivered this way, but it’s changing the way people think about shopping.
“Vintage Speed” vs. “Internet Speed”
Amazon moves fast. They’re a web-based business so they can make changes to their business execution model quickly. The three tier players aren’t used to that kind of speed. The three-tier industry moves at “vintage speed”. Once a year we change what we do. This won’t be fast enough to adjust to Amazon’s moves in the market place.
You don’t need to defeat Amazon, you just need to co-exist with it. But you need to get started. Tier3 can help speed up the process. Learn about the Tier3 strategy to Coexist with Amazon.