Local businesses are suffering from customer starvation. Amazon, on the other hand is financially fit and is on a customer rich diet. They have over 105 million active members in their Prime loyalty program, Amazon has direct communication with 197 million US shoppers EVERY MONTH, and 66% of shoppers communicate with Amazon every month.
Amazon knows how to starve local business
Think of Jeff Bezos is very smart. He isn’t a bad guy or some evil genius. He is a shopper-centric CEO who knows what shoppers want and how when local businesses don’t give them what they want they starve to death. Take a look at the following graph which shows the rapidly increasing CLOSING of local business.
Local retailers and even the retail giants like CVS, Rite Aid and Walmart are waking up to the fact that Amazon is starving them to death. Local businesses live on the financial margins they make when they sell a product or service. Jeff Bezos says, “Your margin is my opportunity.”
Stupid is as stupid does. (Forrest Gump)
Local media seems stupid about what Amazon is doing to local businesses. Keep in mind local media lives by local advertisng revenues. As local businesses are starved to death by Amazon – local media dies along with them. Local media is strangely SILENT about what Amazon is doing to its customers.
The Amazon Starvation Strategy. Amazon uses the revenues from its different revenue streams to wage war in retail. For Amazon it all makes sense. When it wins in retail then manufacturers are forced to advertise and use Amazon web services. It is an ever-expanding monopolistic web. Amazon Ad Revenues
Tough for a retail chain or a local business to compete against a giant that DOES NOT NEED to make profit from its retail business.
How Local Businesses become fit and healthy
- Copy Amazon. Every local business #1 focus needs to copy Amazon and build its customer list. How Amazon builds its customer list. The ONLY reason customers will sign up for direct communication with a local business is because they are going to get something GREAT. Amazon gives free shipping to people who sign up to their Prime program. Free Shipping is GREAT.
- Fight Amazon Every Day. A local business fights Amazon by creating one Amazon Beating Deal every day. It then communicates that deal to the people on its customer list.
- Communicate excitement. Everybody wants information if, and ONLY IF, it is about a GREAT DEAL, exciting or highly informative.