August 2015 —
On a recent rainy day, I was channel surfing when I came across a documentary about Amazon. It’s safe to say there are few people who have the business vision Amazon founder and CEO Jeff Bezos possesses.
Bezos recognized early on that the Internet would forever change the way we conduct business. He envisioned a place where we could buy millions of products with the greatest of ease. Today, of course, there is no one who plays the online retail game better. Amazon had more than $80 billion in online sales last year. That’s more than the next 14 largest retailers’ sales combined.
But don’t be intimidated. You can beat Amazon at its own game and stay relevant in retailing (especially with Gen X and Gen Y) if you take these three steps. They may not be easy or instantaneous, but they’re worth it.
Retailers need to be a 2015 disruptor much like Amazon has been the past 20 years. You can’t be a complacent thinker who only dreams about acting, you need to be a visionary who puts those dreams into action.
That’s what Bezos did. His first step was to study retail and look for a complacent model he could exploit with his vision. That model was the neighborhood and national book store chains, a $16 billion industry. Why? Because he knew a typical 5,000-10,000-square-foot store had a finite number of options a consumer could shop. Bezos asked himself: What if consumers could shop all the millions of titles that have been printed, and purchase them online at one location?
He knew that by o ering an unlimited number of titles, someone would buy one of something. That’s the definition of the Long Tail.
“The theory of the Long Tail,” says Chris Anderson, former editor-in-chief of WIRED magazine, “is that our culture and economy is increasingly shifting away from a focus on a relatively small number of ‘hits’ (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail.”
As the costs of production and distribution fall, especially online, Anderson argues there is less need to lump products and consumers into one-size-fits-all containers. “In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare,” he says.
Anderson predicts that demand for products not available in traditional brick-and-mortar stores is potentially as big as for those that are.
Books, along with their distribution outlets, were a perfect target. They were entrenched in the old model of limited selection, which required customers to make a special trip to browse and discover which titles were available, with the hope of finding what they were looking for, and then hoping it was in stock. The old model was controlled by a few distributors who decided what was available to consumers.
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2. RetailerNOWmag.com AUGUST | 2015 1
WHAT’S INSIDE
2. NAHFA President’s Letter
4. Editor's Note
14. Retail Voice
16. Member Portrait: The Minten sisters
20. Product Focus: Youth Furniture
24. Next Generation: Dorian Stacy Sims
28. Retailer Resource Center Market Guide
34. Member Benefit: Office Depot Savings
42. Government Action: Online Sales Tax
44. Of Note
AUGUST2015
DEPARTMENTS
Cover Story
10. Beat Amazon at Its Own Game
Sales & Marketing
26. 10 Tips for Getting More from
Your Current Customers
36. Retail Performance Report
Operations
38. Want to Sell More Mattresses?
Five takeaways you can
implement this month:
1 Beef up your website. 10
2 Stand out from your
competitors. 14
3 Increase sales from
current customers. 26
4 Save on office supplies. 34
5 Boost mattress sales. 38
TAKE 5!
16
10
20
3. 10 AUGUST | 2015 RetailerNOWmag.com
YousawwhatAmazondidtoindependentbooksellers.
Here’showahomefurnishingsretailerlikeyourselfcan
competewiththem.
By Bill Napier
On a recent rainy day, I was channel surfing when I came across a documentary about Amazon. It’s safe to say there are
few people who have the business vision Amazon founder and CEO Jeff Bezos possesses.
Bezos recognized early on that the Internet would forever change the way we conduct business. He envisioned a place
where we could buy millions of products with the greatest of ease. Today, of course, there is no one who plays the online
retail game better. Amazon had more than $80 billion in online sales last year. That’s more than the next 14 largest retail-
ers’ sales combined.
But don't be intimidated. You can beat Amazon at its own game and stay relevant in retailing (especially with Gen X
and Gen Y) if you take these three steps. They may not be easy or instantaneous, but they’re worth it.
P L AYP L AY
HOW TO BEAT
AMAZON
AT ITS OWN
GAME
HOW TO BEAT
AMAZON
AT ITS OWN
GAME
4. RetailerNOWmag.com AUGUST | 2015 11
Retailers need to be
a 2015 disrupter much
like Amazon has been
the past 20 years. You
can’t be a complacent
thinker who only
dreams about acting,
you need to be a vi-
sionary who puts those
dreams into action.
That’s what Bezos
did. His first step was
to study retail and look
for a complacent model he could exploit with his vision.
That model was the neighborhood and national book store
chains, a $16 billion industry. Why? Because he knew a
typical 5,000-10,000-square-foot store had a finite number of
options a consumer could shop. Bezos asked himself: What if
consumers could shop all the millions of titles that have been
printed, and purchase them online at one location?
He knew that by offering an unlimited number of titles,
someone would buy one of something. That’s the definition of
the Long Tail.
“The theory of the Long Tail,” says Chris Anderson, former
editor-in-chief of WIRED magazine, “is that our culture and
economy is increasingly shifting away from a focus on a relatively
small number of ‘hits’ (mainstream products and markets) at the
head of the demand curve and toward a huge number of niches
in the tail.”
As the costs of production and distribution fall, especially
online, Anderson argues there is less need to lump products and
consumers into one-size-fits-all containers. “In an era without
the constraints of physical shelf space and other bottlenecks
of distribution, narrowly-targeted goods and services can be as
economically attractive as mainstream fare,” he says.
Anderson predicts that demand for products not available in
traditional brick-and-mortar stores is potentially as big as for
those that are.
Books, along with their distribution outlets, were a perfect
target. They were entrenched in the old model of limited selec-
tion, which required customers to make a special trip to browse
and discover which titles were available, with the hope of finding
what they were looking for, and then hoping it was in stock.
The old model was controlled by a few distributors who decided
what was available to consumers. Of course there were millions
upon millions of selections consumers may have wanted to read,
but didn’t know about because of the limited selection. In the
old days, newspaper or magazine book reviews, in-store recom-
mendations and friend’s recommendations drove sales. They are
still a primary source in the buying process, but not before the
Zero Moment of Truth, the information consumers are looking
for online as their first step in the purchase process.
Bezos believed in his vision and he implemented it with pas-
sion and commitment. He had no problem exploiting the old
model of retail, and to this day, he is committed to continuing
this passion for his vision everywhere, in any retail sector, that
becomes complacent.
Does this sound a little familiar?
The home furnishings industry has long displayed the same at-
tributes as the bookstore model, opening the door for Wayfair, One
Kings Lane, Overstock and, of course, Amazon to disrupt the status
quo.
Why? Because consumers may not like or want the limited sofa se-
lection on your floor or the slightly larger selection on your website.
When consumers feel constrained by your store’s selection, they turn
to the Internet, incorporating the Long Tail search for the sofa or
dining room table they want.
Retailers need to put their entire inventory online because study
after study shows more than 80 percent of consumers want to buy lo-
cal, especially Gen X and Millennials. If they can’t find it locally, they
will have no problem buying it from another retailer online whether
that retailer is 20 states away or across the ocean.
Think about this: Why would you want to limit your store sales
and profits by creating a limited selection? Is that how you prefer to
shop? One or two choices of toothpaste, shampoo, T-shirts, etc? If
not, why would you assume others want to shop only your limited
selection?
That’s why Wal-Mart and other big box retailers exist. They offer
choices, thousands of them, and even that is now under attack be-
cause of Amazon’s model. This isn’t a fad or trend, this is retail today.
The more you show, the more you’ll sell and the more you’ll make.
Home furnishings products come in a variety of colors, shapes,
sizes—thousands of manufacturers and distributors with millions of
SKUs. Why limit your selection to brown or black, when there may
be one or 100 consumers in your market who may want purple?
Have you been following DIY shows and trends? It’s all about “my
design,” not “my store’s design.”
A recent search for “furniture” in Amazon’s search engine produced
4.12 million results. That’s a lot of choices for the consumer, who
will probably find what they’re looking for on Amazon. Add this to
the other big e-retailers and consumers have tens of millions of items
they can find and buy with a swipe and click.
So the first thing you must do is look at your website. It must be
The First
MOVE
Have a vision and
the passion for
that vision, plus
the unwavering
commitment to
implement it.
AMAZON
MODEL
GAME ON Pick a product—any
product—and chances are Amazon
sells thousands of different versions
of it. Here's the rub: You can do the
same thing from your website.
5. 12 AUGUST | 2015 RetailerNOWmag.com
mobile responsive. The three marketing fundamentals still apply
to your website and are still profound:
• Attract new customers to your store and website.
• Engage them with your products and your brand message.
• Connect with them by delivering sales leads and opportuni-
ties.
While the fundamentals are the same, it’s how you get these
fundamentals to work that’s changed. This requires a great web-
site layout that’s packed with product data. With that said, here
are a few basic website essentials:
• Site design and page layouts must be easy to search, view
and navigate.
• Show coordinating items that match related items in a
collection. If a bed has matching case pieces or if a sofa has
matching chair, ottoman, loveseat and sectional, you need to
show it.
• Use multiple image viewer and rich media to better show
and demonstrate products.
• Navigation should be logical, easy-to-use and simple to
understand.
• Provide the ability to tag and sort merchandise.
• On the back end you need inventory data integration for
pricing, inventory availability, etc.
• Administrative tools so you can manage all the elements of
your site.
• Integrated marketing to communicate promotions and
marketing messages on every page. Remember, half of site
entrances come from the item/brand page search and the
consumer may never see your home page that shows your
promotions.
• Wish list/save projects tools that let consumers save their
favorites and salespeople save client projects.
• Store location and information page with interactive maps.
• Financing tools like online special financing applications are
important for retailers that offer this.
So, you need product data, lots of it. Product data that contains
tons of content, not just a picture and some romance copy, but
comprehensive attribute data on every SKU or collection that
you have open to buy, even if that’s more than 100 SKUs, show it
and sell it. (The North American Home Furnishings Association
can help you get that product data in an easy standardized format
with its DataLink program, www.naha.org/datalink.)
If you’re not doing special orders it’s time to rethink your logic.
By not having all of your available open to buy and inventory on
your website, consumers won’t find that item they may be looking
for locally. Why push your customers to Amazon?
The Second
MOVE
Knowledge is
power...inventory
management,
point.of.sale
and beyond.
Do you measure sales,
expenses, and advertising
returns to make more
strategic business deci-
sions daily or by period?
Amazon does.
Do you measure at-
tainable goals based on
historical sales data? Do
you maximize growth
and create incentives
for your sales team by
developing a road map to
increase average invoice amounts? Amazon does.
Are you ahead of the curve with robust reporting? Cap-
turing best sellers, slow movers, shopping patterns, seasonal
trends, advertising returns and more—and can you quickly generate
any report you desire? Amazon does.
Do you keep an eye on purchase orders, approvals, consignments,
and yearly sales comparisons at any moment, allowing you to stay
up to speed with significant events and gauge areas of opportunity?
Amazon does.
These are just a few of the metrics that Bezos has integrated into
his business model. Businesses don’t grow by accident. The growth
of your business isn’t a matter of luck or the state of the economy, or
anything external. It is the result of creating a plan and carrying it
over to every aspect of your business with passion and an unwaver-
ing commitment to excellence. Obviously you can’t implement all of
these metrics overnight, but think about picking one and commit to
owning it. When you do, add another. And then another. Very soon,
you’ll be playing Amazon’s game.
Your
w
ebsite
is
not mobile
ready.
Go back to start.
Measure advertising
returns to make
future decisions.
Move ahead 3 spaces.
6. RetailerNOWmag.com AUGUST | 2015 13
Retailers need to either
invest in personnel who
understand digital mar-
keting or partner with
someone who does. Mil-
lennials connect digitally
across all platforms and
you must be there, when,
where and how they
want to find you. If not,
they will default to those
companies that will. I’m
talking about every social
site that promotes local products and services. YELP, Google
Reviews, City Search, Foursquare, YP.com, and all the others.
There is a great product called Geo-Marketing that can place
you on all of these sites and many, many more. You can learn more
at http://geomarketing.imagineretailer.com/
You must include pricing and provide a shopping cart to buy
products on your website. This should be a no-brainer, but, sadly,
many home furnishings websites do not allow buyers to actually
buy. It is so easy to find a price online for anything by Googling the
SKU, loading the image into Google images and more. Get over
showrooming and embrace it. All you need to say in your market-
ing is you’ll match any price on that exact item.
The Third
MOVE
Relentlessly
pursue
excellence in
the customer
experience.
Don’t forget Live Chat.
Everyone wants to text each other these days. Calling a
phone number is sooooo 20th century. According to Forrester
Research, 62 percent of consumers reported being more likely to
purchase from a site again that employs Live Chat; 44 percent
want to chat with a live person while shopping; and 38 percent
said they had made their purchase due to the chat session itself.
You can’t do this alone. You need a person or marketing
partner to manage your website daily, and review the analytics to
plan where products should be ranked.
You need someone to manage digital marketing—adwords,
optimization, retargeting, social media presence, on-page SEO,
social media ads, YouTube channel feeds on product/promo-
tions, blogs and more.
Will this cost you time and money? Absolutely, but it won’t be
nearly as exhausting and expensive as being left behind like all
those independent bookstores that were caught napping when
Bezos came along. Amazon plays a ruthless game, demanding
retailers from every industry build a better mousetrap or be left
behind. Don’t feel intimidated, instead learn from Bezos and
build on his success.
There’s plenty of room at the table to play Amazon’s game.
Why should Amazon have all the fun?
Bill Napier is managing partner of Napier Market-
ing Group. He is a strategic consultant to Imagine
Advertising, Englander Mattress and several other
companies in the home furnishing industry. Contact
him at billnapier@napiermkt.com.
Acustomerused
yourLiveChat.
Moveahead2
spaces.
You chose not to price
you products online.
Go back 1 space.
Create a plan and
carry it over to every
aspect of your business.
Soon, you’ll be playing
Amazon’s game.
“
”