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What B2B Companies Must Learn from 10 Reasons Why Amazon is Destroying Retailers

Dave Kurlan | Apr 19, 2017 71 views No Comments

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Amazon generated almost $44 Billion in net revenue last year and it had to come from somewhere.  That’s not $44 Billion that people wouldn’t have spent if not for Amazon.  It’s money that people would have spent, at some retailer, probably within an hour of their home or office, but chose to buy from Amazon instead.  

You may think it’s because Amazon saves them money but that isn’t necessarily true.  And you may think it’s simply more convenient to order from your laptop or mobile device but that might not be the case either.  I’m going to share 10 reasons for why this is happening and you might be surprised with my conclusion.  Stay with me to the end because the lesson is for B2B Sellers.How often have you needed or wanted something today?  Paying for overnight shipping was not acceptable, free prime two-day shipping was not soon enough, and ground shipping meant waiting forever.  You want it now.

So you traveled to the retailer and what happened?  If your experience was anything like mine, it was one of the following:

  1. The store was open but it didn’t seem like anyone was working that day
  2. You found someone but they knew less than your pet
  3. You were attacked by an overly aggressive salesperson
  4. You found what you wanted but the checkout line wasn’t moving
  5. The salesperson tried to talk you into something different than what you wanted
  6. They didn’t have what you wanted in stock (or in your size or preferred color).
  7. You made it to the cashier but it took 10-minutes to find an SKU that would scan in their computer
  8. Their tiny bags were too small for what you purchased
  9. Their skimpy bags didn’t support the weight of what you purchased
  10. You had to wait for them to bring a big box from “the back” and you could have driven to an Amazon warehouse and back in the time it took them.

Did you notice that I didn’t say you found what you wanted but it was 10% more than on Amazon?

Amazon is destroying them.  It’s in stock.  You can get it tomorrow.  You don’t have to deal with morons.  There’s never a line.  They ship it right to your door  and without a single salesperson they take care of you in a way that retailers seemingly can’t.  

Because they are losing revenue and profit, retailers are compensating and making things worse.  They seem to specialize in slow, dumb, incompetent, out of stock, outdated and frustrating.  Why would anyone choose to have this experience when they can point, click, pay and get what they want?

If I ran a retail chain that was getting destroyed by Amazon, we would do the complete opposite of what most retailers are doing.  We’re already losing money, so doing more of the same won’t change our fate. I would hire more staff, provide better training, and focus on the customer experience – doing whatever it takes to improve it and hope that people are so happy coming in, being helped, getting in an out on their timeline, and getting what they wanted, that the positive word of mouth could turn things around.

And that brings us to sales.  Selling has changed dramatically.  But the changes aren’t limited to B2B sales.  B2C selling has changed just as much – perhaps even more.  So why are retailers still doing things the same way as they were 40 years ago?  For the most part their employees are low paid compared with their B2B cousins, under trained on product, not trained or trained using antiquated methods for greeting customers and helping them buy, and most of the employees don’t seem to care all that much.  I believe the retailers are getting exactly what they are paying for and until they raise their expectations, compensation and training methods, they will continue to get destroyed by Amazon.

Of course there are exceptions.  Apple and Niketown immediately come to mind.  Neiman Marcus has a history of excellence.  But then who?  The list is pretty short.

There is a lot to be learned from this.  B2B companies can easily see into the crystal ball because that’s what lies in store for them if they don’t realize that everything about selling has changed. If their salespeople are still selling transactionally, relying on demos and quotes, and trying to compete on price, they will be obsolete in two years.  Buyers will have no use for them.  They will be redundant.  

Your salespeople must follow a milestone-centric, customer focused sales process, take a consultative approach, sell value and abandon their old methods.  You are running out of time.

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