It’s all about the customer experience.
Australia’s leading accounting and advisory firm, RSM Australia director, Andrew Sykes (pictured below) investigates why Amazon, a major player and pioneer in online retail, is shifting back to bricks and mortar.
“Amazon is a company found on three core principles of selection, low prices and convenience. This famously outlined on the “napkin sketch” by founder Jeff Bezos. What this diagram seems to miss is profits. Amazon is a company that operates on near zero margins, relying on cashflow for sustainability. But where is the profit in this diagram. Perhaps Amazon is learning that you need human experience and customer loyalty to generate profit,” Sykes explained.
“All business can pick up on this. The age of digital means that the customer has near perfect information on price and product. Competition on pricing leads you with the Amazon dilemma – market share with no margin. Working on customer service is what really drives profits in your business,” he added.
Simple strategies to improve this, according to Sykes, include:
1. Train service skills – teach staff to smile and get to know customers. Just being recognised and greeted can lead to a big jump in sales.
2. Examine touch points – review every touch point with a client and see how it can be improved.
3. Define a customer service strategy – talk to staff about this strategy and make sure they understand it. Beyond this make sure they live it every day.
4. Improve your customer interactions – make every single customer feel like they are valued and their business appreciated.
5. Listen – do not be afraid of feedback. Allow customers to have a say and act on the feedback. Even if it’s bad, it can be improved.
The customer experience when they deal with a business can often be undervalued. The move by Amazon just may show us that it is the most important part of long term sustainability.