Thursday, 13 July 2017

Retail Therapy

As I listened to the blog post "Amazon and the future of retail" on Yahoo finance,,  I started to think.

Back in 2009 General Growth properties declared bankruptcy. It was all about the debt that financed mall development. Success in retailing comes from marketing but profitability comes from real estate smarts. Now, with Amazon and Ali Baba and Internet retailing for every product that you might want to buy, what is being taken out in the business model is real estate. Of course, Walmart saw this in its own way starting in the 70s. And the retailing innovations went ahead: warehouse club Costco and category killer Best Buy in the 80s.

For marketers the good news about Internet retailing is a greater emphasis on marketing from a business point of view. Know your customer is more relevant than ever. Enter analytics. But there's always a catch. Profitability still requires doing things that others can't. And analytics is probably a leveler. Something you have to do but it may not get you ahead of your competitor. Can there be a winning response to Amazon like Costco to Walmart?

Everyone has heard of Amazon wanting to buy Whole Foods. And everyone that wears glasses knows about Warby Parker. And my daughter likes Opening Ceremony, like so many young people now wanting to live in cities rather than suburbs. And then also our country will have more and more older people. There is a nice Harvard Business School case titled Ito Yokado. Japan from a few decades ago can teach us something about how (not) to make retailing a profitable venture. 

And if you are asking yourself: is there anything left for Amazon to improve on, just wait for a link to my new paper with my student Ye Qiu. Yes, there is retail therapy.

1 comment:

Aishwarya Rao said...

I wish you wrote more often! Can't wait to read your new paper :-)