Book Review - The Everything Store by Brad Stone

This book i picked up to understand the history of Amazon, the company i work for now. Its a fantastic long read for anybody who wants to understand the evolution of this startup into a behemoth of today; it takes the readers through this time travel of 2 decades with detailing and gives a peek into the intriguing mind of its founder - Jeff Bezoz.

The biographer, Brad Stone has done significant research on why Amazon is where it is, and what factors, events and values contributed to this journey and continues to.

For me, as a new-joinee to a company which is know by its peculiar culture; the book really portrays the background on why this culture is like that.

Whether its the leadership principles of Amazon or its peculiar practices of using a 6 pager doc vs a presentation or why meetings start as a study hall where everyone reads silently or why there are PRFAQs made or why 1  empty chair in a meeting...its all answered there!

I personally liked the ways of a founder on how to create a culture that is a photocopy of how he thinks. And like a great learner, he has picked up a few values from the books he read or values from other companies into those leadership principles.

Its a great read for anybody who either wants to know about Amazon or who wants to know how to define the culture of a new company.

Some of the key things i didnt know before i read the book about Amazon -

1. Bezoz is an avid fiction/non fiction reader and has done changes in business strategy once he read a book.
2. Bezoz during tumultuous times of 2001 meltdown wrote something like 'I am not my stock price' on his whiteboard in office.
3. Bezoz tore a reciept of a team meal after paying saying that i am not going to claim it from the company, to stress principle of frugality.
4. Bezoz's way of negotiating while acquiring zappos or Quidsi is quite tough.
5. He is quite driven by future and has taken long term bets on projects which might appear science fiction at start. Thats a stark difference from other companies.
6. How Amazon safeguards the interests of customers by negotiating hard with vendors/partners.
7. How kindle happened and Bezoz delayed the launch till the ebook universe is at least 10000 ebooks.
8. How he saw future and converted Amazon into a technology company from an e-retailer.

Its a great read! Go for it.

Customers would have wanted a faster horse! - Henry Ford

#Convenience is the biggest attribute of future. Saving #time is the noblest thing to do for consumers. #Brands who marry #technology with #creativity to solve consumer problems with these 2 built in purposes (Convenience & lightening fast) will be the biggest brands of the future.

If you see history with recent successes, its there. Whether it is #Apple bringing Ipods and Iphones with huge convenience offerings or #Facebook with faster way to connect with people or #Google with its fastest search or #Amazon with its fastest delivery, broadest selection & value (Convenience). Its whats that happened. Creating convenience thru technology with creativity in exploring the unknown. 

Why ecommerce players are obsessive about number of clicks? Because they take consumer convenience as obsession to work at breakneck speed to make it happen. From multiple it became 'one click purchase' which in itself was a milestone. But just for a while. Today, consumers we are moving from many clicks to one click to zero clicks. Thats where #AI takes over! And thats what devices/apps like #Alexa or #GoogleHome or #Siri or #GoogleAssistant are doing. Taking convenience to the #ZEROCLICK saving time for the consumers to get what they want at lightening speed!

Why Tech companies are burning midnight oil to create smart appliances via Internet of Things (IOT) that will obey voice commands? Sounds bizarre. Taking customer convenience to an extreme. But that is the future. 3D printing was like a fairy's magic in childhood stories. But thats a reality. Why? To make consumer able to dream and create things basis his imagination. And #Imagination is human being's greatest asset for progress.

And did consumer ask for AI enabled products? Or smart bands? Or Smart cars? Did they dream about it? Did any consumer researches told that they have this need? I doubt it. Its the companies with obsession for consumer, that think about it, put in effort and take risks & create such #innovations. And rule #future.

As Henry Ford puts it fantastically well - “If I had asked people what they wanted, they would have said faster horses.”

Online meets Offline in world's hottest market - India

We are witnessing what is offline and online convergence in India. #Online players are forging partnerships with #offline and vice versa.

News of #Amazon soon picking up stake in #Future-retail gets the #Bezos led company a foothold in indian grocery and mass fashion (#BigBazaar, #Hypercity & #FBB). It has already tied up earlier with mid premium fashion retailer #Shoppersstop. It already runs numerous programs like "i have space" to convert huge number of offline grocers to work as delivery points of pick n drop facility to consumers.

On the other hand #Walmart a global offline leader bought #Flipkart to capture indian online space. It already has its cash and carry offline format which can lead to partnerships with lot of offline small businesses. It will further forge more partnerships in India.

While a player like Future group in itself, sensing Walmart' entry via flipkart; has intensified its '#Everyday-low-price' campaign. Its a proposition which Walmart originated with globally and Future group is wanting to create its ownership on the position in India.

This market is going to see fantastic omnichannel efforts going forward. A #kindle selling in a bigbazaar to fast grocery from Flipkart err #Walkart!! Stay tuned.

Category Creation - Path to phenomenal success

#Category #creation has recently caught my attention. And i am surprised how the companies which can be counted in world's top 20 have created new categories more often than not -

Be it #technology which is an easy brewing ground for innovation, #Apple from Macs to ipods to ipads to iphones, have done that many times. #Google, #Facebook, #Uber, #Airbnb are such techno examples where they created new categories. Taken away human imagination to a new level and changed the behaviour of consumer with better solutions/benefits than they could have thought.

Be it #retail, #Amazon has again replaced distances with thier one click shopping and fastest deliveries. And new categories like #Alexa, #Echo, #Kindle etc, things we never thought should exist!

How? Common aspects are - 1.Working on a new paradigm of #consumer-#benefit and problem solving. 2. Making it #fast enough connect with #ecosystem that competition cant ape quickly.

Read on this #HBR article talking about coffee example of #Starbucks and #Keurig where despite coffee consumption going down, sales on coffee consumption grew exponentially...by creating new category for coffee consumption! Read it here - https://hbr.org/2011/09/why-category-creation-is-the-u

#marketing #innovation #disruption

Retailing - Offline > Online (Part 2)

As explained in the first article, the premise here is that retailing basics dont change whether its online store or an offline store. In last article, 5 Key Areas of retail were described - Consumer Experience, People, Product, Topline & Bottomline. In this article, i would exhibit the linkages to online retailing, discuss key drivers & key actions/strategies enabling them.

1.Product/Service - For any business to succeed, the product/service which you are selling, has to be desirable for customers, offers a good quality experience on usage & adds to a consumer's life. However, before a consumer can experience the product post purchase, her attention has to be intercepted by your product/service for it to get sold.

This is where Visual Merchandising plays a role in offline retailing. From the window of the store talking about that 'stitchless shirt' which intrigues your mind & tickles you to enter the store; to attractive display of product with wonderful VM talking about the story behind say the ' no stitching' or 'anti-radiation mobile pocket' etc. You pickup the product & then interact with the customer associate & give it a shot. Boom. The sale is over.

However in online retailing, there is no intriguing window/VM to have product talk you into buying it? That gets replaced by the 'User Interface & Navigation' of the site enabling fastest discovery of such products. The window is the 'Home Page banner' wooing you to buy that stitchless shirt! VM is replaced by the 'quality of pictures/videos' shot in the studio with beautiful models to make you comfortable while making the buying decision.

Another barrier in online app/website is that you cant define a layout of the store to fix the category navigation the way it happens in offline retailing - putting the destination categories at the back of store & impulse next to cash counter, highlighting seasonal stories at the first fixture & basics at the back. In online retailing, its dependent on how the consumer uses the provided filters to lead to 'product discovery'. However, with #BIGDATA analytics, app should be able to provide varying UIs basis what a purchases. My home page banner on say an Amazon should vary from say yours; leading to bring in that personalized product discovery! Thats more power to online retailing if done well.

2.People - In offline retailing, the omnipresent 'human touch' is what at times makes you discover a new category or brand you would never buy. Thats the power of human interaction. It delivers variable and personalized and live-dynamic delivery of knowledge & product experience. Thats why good brands invest in training their sales people. A product/Brands gets alive in the way creator has conceptualized only when a person gives that product presentation making the story complete. That, 'Joe' in your favourite high street store calls you when your desired product arrives, wishes you on your birthday & invites you to the store, helps you get benefited by the steal deals, customizes your clothes as per your taste/measurements, and once in a while lets you have your ego massaged; is something! Something, that a fixed computer screen cant match!

In online retailing, this important bit gets replaced by the Product Presentation(Picture/Video, Copy, size chart, reviews, ratings, etc). Now, basis all this information, one can take the decision; and as these factors are incomplete vs a human presentation; thats why ecommerce companies offer liberal return policy & faster delivery mechanisms trying to make up for this void & making is easier for consumer to shop. However, with advanced AI & bots; this is getting better to give that human touch to ecommerce.

3.Customer Experience - If the consumer walks into your store & gets presented by the sales person; but doesn't get serviced properly or the store experience is not good given sloppy display or no cooling or rude behavior; everything goes for a toss. A bad consumer experience is like a camphor catching fire; it burns & burns the entire neighborhood of customers. Thus, offline art of retaining is all about consumer experience, the capital factor.

In offline, the experience is elongated. From website experience to the product delivery. The app wasnt loading or the filters were going wonky or the payment gateway wasnt working; all kills the experience. But so does late delivery of goods or rude behavior of delivery boy or wrong delivery of product in the box. Online retailing has its own challenges to ensure a great consumer experience. Most of the ecommerce players have been able to fix the technology side; however most of the issues crop up on the logistics/warehousing errors.

4.Top-line - As discussed in Part 1, Topline being the objective No 2; there needs to be clear understanding on drivers of topline & relationship in between to revenue. As in offline, online retail has similar relationship -

Offline Sales = Footfalls (No of Customers * Freq) X Conversion X Basket Size X Average Sales Value

Online Sales = No of hits (No of unique visitors * visits) X Conversion (Sales Transactions/visits) X Cart items X Average Sales Value

Now the drivers in online piece, are obviously -

A. No of hits or Traffic to the site driven by lead generation out of various campaigns (SEO, SMM, ATL, BTL etc);

B. Conversion on the site driven by 1. Ease of product discovery & transaction on website (User Interface & Steps to transaction completion) 2. Product Presentation (Pics/vids/info/reviews/Pricing) enabling users to make a buying decision 3. Transaction completion net of returns (Lot of transactions get cancelled post conversion/post delivery due to poor acceptance or impulse) which needs to be controlled with better product quality checks/ product presentation & efficiency in logistics & delivery.

C. Basket Size on the eCommerce website can be boosted by running campaigns of cross promotion (shop across shirts & trousers & get extra discount), shipping free (order > Rs 1000 get shipping free) and so on. Cart can also be boosted with recommendations showing users who bought A also bought this book. Basically giving a benefit (discount, freebie) on increased basket.

D. Average Sales Value is the last factor on the topline; which is driven by premium assortment, branded merchandise, better quality and so on. Sell more suits and blazers than shirts & your average sales value sky rockets! How can a website influence you to up-trade your ASP? Using recommendations tickling the ego (Consumers choosing an apple iphone have bought apple branded accessories only); highlighting high priced products basis shopping history; or plain and simple 'personalized pricing' within an app (Same hotel room to Mr X is $1000 while Mr Y is $1200).

5. Bottom-line - Obviously, this is the No 1 objective for which businesses exist. One needs to drive all revenue factors up and all costs factors down without dropping consumer experience, product quality & people standards in offline retail. Same factors apply here in online retail - One needs to boost margins by arm-twisting vendors, ask minimum guarantees, increase #private #labels, boost traffic at lowest cash burn, drop costs of logistics & warehousing, and reduce discounts and so on. Make unit economics work!

I think the basics remain the same; be it online or offline; its the passion that drives the business ahead to serve consumers! I hope this 2 part article; was a good read. If yes, please drop in your valuable comments & lets strike a conversation around retailing - Offline or Online!

For going to part 1 of this article, please click here.