The Amazon logo contains a somewhat hidden element: an arrow that points from A to Z.
It now stands as a reminder that the online retail giant had
humble beginnings as an online bookstore. Amazon has surely worked its way
through the alphabet by now as it sells just about anything you could possibly
need, offers same day delivery in select cities, and even has original
programming via Amazon Prime.
But Amazon might consider adding another arrow leading back
to A as it begins to move from online to retail and opens its first bookstore in Seattle.
Oh, and it’s also launched a locker program in Baltimore and a has
installed pickup locations at Universities of Akron and Texas at Austin with
Jeff Bezos saying that they plan to open more retail stores.
So what gives?
Amazon’s basic platform is what put bookstores out of
business. It also puts many other local stores in danger by undercutting
virtually everyone’s prices. So why invest in overhead that was shown to be
incredibly vulnerable to online shopping?
According to Bezos, this isn’t about revenue and that’s what makes
this noteworthy.
Amazon is willing to lose money if it creates a better brand
experience.
We’ve previously touched on our retail knowledge and experience
in the world of financial institutions and in spite of the clear market gap
between Amazon and credit unions, it’s not hard to draw parallels between how
the two can approach retail.
1)
Online and
in-person experiences aren’t mutually exclusive
Even as the banking industry pushes to make online and mobile banking the most accomodating experience it can be, it’s still important for FIs to think about the in-branch experience. Amazon is taking a similar approach. Their model has always been based on online experiences, but now they’re undertaking an exercise in enhancing brand loyalty by giving people a chance to interact with the A to Z live and in person.
Even as the banking industry pushes to make online and mobile banking the most accomodating experience it can be, it’s still important for FIs to think about the in-branch experience. Amazon is taking a similar approach. Their model has always been based on online experiences, but now they’re undertaking an exercise in enhancing brand loyalty by giving people a chance to interact with the A to Z live and in person.
2) Sometimes, you have to ignore ROI
Amazon is a company that has essentially never turned a profit. In lieu of that, it directs its considerable revenue stream into new brand experiences (Prime, original programming, same-day shipping, etc.). And Bezos himself said that these retail environments aren’t about making money and everyone could stand to approach brand experiences this way. Ultimately, this is about forming a lasting connection with a consumer. For Amazon, it’s what will make them first-in-mind for shoppers and for credit unions, it’s what can turn savings account holders into lifelong, profitable members.
Amazon is a company that has essentially never turned a profit. In lieu of that, it directs its considerable revenue stream into new brand experiences (Prime, original programming, same-day shipping, etc.). And Bezos himself said that these retail environments aren’t about making money and everyone could stand to approach brand experiences this way. Ultimately, this is about forming a lasting connection with a consumer. For Amazon, it’s what will make them first-in-mind for shoppers and for credit unions, it’s what can turn savings account holders into lifelong, profitable members.
3)
Retail is an
education opportunity
It always will be in a way that online isn’t. For credit unions, it’s an opportunity to get member to enroll in a high yield checking account or see how your CU offers a really low APR on auto loans. For Amazon, they’re going to be pushing digital services and tech products in their “bookstores.” Amazon Echo, Fire tablet, Fire TV, etc. will all be pushed along with a nice new hardcover. What services are you educating people about when they come into your branch?
It always will be in a way that online isn’t. For credit unions, it’s an opportunity to get member to enroll in a high yield checking account or see how your CU offers a really low APR on auto loans. For Amazon, they’re going to be pushing digital services and tech products in their “bookstores.” Amazon Echo, Fire tablet, Fire TV, etc. will all be pushed along with a nice new hardcover. What services are you educating people about when they come into your branch?
There are a lot of lessons to be learned here, but to go
even broader, take a page from Amazon and just try something new. They’re aware
that they have to keep innovating in order to keep customers coming back. And
sometimes innovation happens by looking at what came before or utilizing what
might seem simple.
