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An Open Letter to All Retail Leaders:
Today’s Q4 earnings announcement by Amazon was simply amazing. Their Q4 sales grew 18%. It would have been 24% if the dollar hadn’t gained strength against foreign currencies over the past few months.
For those of you sitting in your proverbial basements weathering the economic storm, the noise that sounds like a freight train is Amazon tearing apart your home like an F5 twister. This may sound like an extreme metaphor, but given the shrinking ecnonomy, where do you think Amazon’s growth is coming from? You.
As tempting as it is to hunker down in 2009, I strongly recommend that you find a way to make smart investments that allow you to at least preserve your market share. However, I doubt that the inspiration for a great new idea or strategy to preserve your market share will be found while hunkered down.
My advice is to come out and look around. Talk to other retailers. Be a student of other industries.
There are a variety of opportunities find the inspiration for new ideas. But, I’m going to recommend one that is familiar to me. I want you to consider unfreezing your travel budgets so you and the smart people you’ve hired can go out and find new ideas and innovations. Go to conferences and trade shows. While I hope you decide to go to those that are produced by Shop.org, going to any conference that allows you to hear new ideas and network with your peers who are facing similar challenges will give you a shot at not just surviving but maybe even giving Amazon a run for their money.
Regards,
Scott
I enjoyed reading your well written letter. Your sound reasoning and thoughtful insight are wise and inspiring. One other consideration for your audience is perhaps to remember that consumers aren’t scared. We’re worried, we’re concerned, but we’re confident things will change for the better.
Amazon continues to prove the model, the innovations will continue, but suddenly the economics is leading some to want to sit this one out. Pulling over to the sidelines now risks losing momentum and the active mindset needed to stay in the game. I’ve been in retail since ’85 and have lived through cycles, the cost cutting mindset is not the framework you want to be operating under. Especially in an industry subsegment that is changing this fast.
Your open letter is basically a push to retailers to go attend conferences? Really? That’s all it takes for them to fix their problems? Conferences like shop.org are a huge echo chamber. You can get the same ideas by reading blogs, magazine and traditional media. There are no secrets – certainly none that they will pick up at conferences like shop.org. If they want their business to get better they must invest in innovation, supply chain, and customer centric marketing. Presumably the “smart” people they hired already know this but I have been surprised before.
Peter,
Thank you for sharing your thoughts.
I agree that blogs, magazines, etc. have great information and industry professionals should continue relying on these for information.
And, going to conferences is only one way to fix problems. But, it’s one way that can have a very high ROI and offers benefits that can’t be replicated through other means.
For example, say you learn about a great new tool or technology in a blog. Having someone to serve as a reference of the tool, who you can trust because you formed a relationship with them at an in-persion event can be invaluable. I frequently say that the relationships our members form at events, among many other benefits, frequently allow them to avoid very expensive mistakes.
Scott