When customers go to Amazon and buy, Amazon is the brand, not what they purchased. Is the combined power of the big-box stores, bricks and mortar with the Internet and “get anything online” systematically killing off local brand equity? The only protection against this fate is to build your own “niche market” or become a “gorilla.”
Consider the effect that gorillas’ Best Buy, Walmart, Home Depot, Staples and Target have had on Hudson Valley retailers and service providers as well. The Geek Squad has a presence in over 1,100 Best Buy stores and Radio Shack has kiosks in all 1,490 Target locations. Are smaller businesses being pushed out?
What business is Amazon in? It started in 1995 as an online bookseller and struggled for five years, including the dot-com bubble burst. Amazon finally turned its first profit in the fourth quarter of 2001. That modest profit convinced skeptics that the business model could be profitable. Groupon may be following a similar path now.
Today, Amazon is an octopus with tentacles stretching around the globe. Product lines include books, CDs, DVDs, software, consumer electronics, kitchen items, tools, lawn and garden items, toys and games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, clothing, industrial and scientific supplies, and groceries. Is there no limit to its growth or diversification?
Online companies such as Amazon – the 800-pound gorillas – will set the agenda for the future of the Internet just as the Walmarts and Home Depots have for bricks and mortar businesses. There will only be two kinds of companies in the future, “gorillas” or “niche players.”
How to succeed as a niche player. According to author Anthony W. Ulwick successful niche players have figured out what jobs customers are trying to get done and delivered superior solutions. They have carefully segmented their market, targeted the best growth opportunities and positioned their current products or services to address the underserved jobs that really matter to their customers.
In “What Customers Want,” although Ulwick focuses on how “innovators” are successful, the same principles apply for niche players. Niche marketers may focus on product or service innovation.
“To succeed, companies must discover which customer outcomes are being underserved and then devise and provide creative features in their products and services that do a better job of addressing those outcomes.”
New market innovation occurs when a niche player discovers that a customer is struggling to get a job done on their own because no product or service exists. The PC, cell phone and wireless networks are examples of new innovations initiated by people who were, at one time niche marketers.
Ulwick says that people want more value at a better price. “Dell successfully achieved operational innovation in the computer industry by cutting out the middleman with its ‘buy direct’ approach.” Steve Jobs and Bill Gates, by creating inexpensive user-friendly personal computers, turned non-consumers into a massive global market with the PC.
Determine whether you will be a gorilla or niche player and, in either case, remember that both go out of business every day. Continue to be successful by constantly asking, what jobs your customers are trying to get done. Then help them complete them faster, safer, or cheaper than before.
Questions for discussion:
• What are the most important jobs, task or activities that our customers or prospective customers are trying to get done?
•How can the utilization of the unique set of skills talents and abilities of our people, including outside suppliers, vendors and consultants provide the best solution?
Joe Murtagh is The DreamSpeaker, an international keynote speaker, meeting facilitator and business trainer. For questions or comments, [email protected], www.TheDreamSpeaker.com or call 800-239-0058.
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