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BrainTrust Query: Non-Retail Change Agents

October 17, 2011

Through a special arrangement, presented here for discussion is an excerpt from a current article from Insight-Driven Retailing Blog.

During my OpenWorld presentation in early October, I pointed out that four men and their associated mega-companies have had a huge effect on the retail industry without being traditional retailers:

  • Jeff Bezos - Amazon
  • Steve Jobs - Apple
  • Mark Zuckerberg - Facebook
  • Larry Page - Google

Obviously Amazon is a retailer, but when they started they were definitely not considered a traditional retailer. Arguably, Amazon set the standard for pure-play e-commerce and has been a leading innovator for online shopping, including early pushes into user created content, mobile commerce, and personalization. And don't forget they are putting lockers in malls and on campuses for easy pickup of their products. Some might call that a small step toward a physical store.

Apple Stores have been the king-of-the-hill with the highest sales-per-square-foot, one of the best customer service models, and innovative features such as the Genius Bar, mobile POS, and iPads with product information. Their bigger contribution has been moving commerce to mobile devices, which is a channel that will continue to grow.

Now no one will mistake Facebook for a retailer, but they continue to influence how consumers talk about brands and products. The forthcoming "want" and "own" buttons will make it easier for people to express their relationship to products, and probably spur conversations that result in purchases.

Then there's Google, which has been helping consumers search for products, show them off with haul videos on YouTube, and more recently introducing a new payment method. But the big story here is Google's foray into physical stores. They are starting small with their Chromezone store-within-a-store concept for selling Chrome-based netbooks. With their purchase of Motorola, I can see them adding mobile phones, GoogleTV boxes, and other consumer devices in the near future. Isn't that exactly how Apple got started in their quest for stores?

It's tough being a retailer, especially when these four companies keep changing the rules.

FINANCIALS:     [NASDAQ:AMZN]

Discussion Questions:

Discussion Questions: Which of the four companies mentioned in the article -- Amazon, Apple, Facebook and Google -- do you think has had the most significant effect on retail? Which has the greatest potential to transform retailing in the future?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Which of the four companies mentioned in the article do you think has the greatest potential to transform retailing in the future?

Comments:

Amazon wins this hands down. They are the only major company online or bricks, in the self-service world, that understand SELLING vs. order taking. It's no contest!

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

To this point I believe Amazon has had the most significant effect on retail. They have changed the way a great many of us buy all sorts of products and have seriously impacted traditional bricks and mortar retailers.

The future may belong to Apple with their mastery of technology products and the capacity to make shopping easier, safer and much more convenient for shoppers. iPads and iPhones are making it easy to shop today; it will be interesting to see what Apple comes up with next to stay on top of the technology curve.

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J. Peter Deeb, Managing Partner, Deeb MacDonald & Associates, L.L.C.

I vote for Steve Jobs not only for the Apple Stores but even more so because of the impact that the iPhone has had on "all the above."

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

Four great companies, all doing wonderful things ... and profiting from them. Lots to learn from each.

Who has had the most significant influence to date? In my mind, that would be Amazon. They blazed the e-retailing path that so many others have followed. They were (and still are) the best in creating a whole new retailing channel.

As for who has the most potential going forward, I would vote for Google. They have the widest 'scope' of anyone. The question is, will they be able to leverage all of their amazing abilities and execute them at the retail level? I wouldn't bet against them.

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Kevin Graff, President, Graff Retail

Of the four companies, Amazon has had the greatest impact on retailing...so far. It has set a standard for what makes a great website (broad assortments, competitive pricing, easy navigation and good execution) and has raised the bar for other e-commerce and multichannel retailers. Amazon also refuses to rest on its laurels, whether by expanding its variety or by moving aggressively into the "mobile" business.

Of the other three companies, Apple has been hugely influential in terms of its store experience, but has had the benefit of selling its own remarkable products. It's clear that Facebook and Google are working hard to become comprehensive e-commerce portals, so the answer to the question may be different in another five years.

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Dick Seesel, Principal, Retailing In Focus LLC

Jeff Bezos and Amazon have had the most significant effect on retail. Amazon has been able to cross the bridge from retailer to a trusted brand and all this has been done in the digital online world. Retailers strive to become brands yet few actually are able to cross that chasm. Amazon has been able to do this without a physical presence. Apple has been the device catalyst, Google defined search and Facebook empowered the world of community approval. All have had their impact on retail but Amazon operationalized the digital world from a retailers perspective and has become the model that retailers are trying to replicate.

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Adrian Weidmann, Principal, StoreStream Metrics, LLC

The four companies, and other companies yet to come, are changing retail. Retail is in a constant state of change, just like other businesses. Still, basic tenets exist: good customer service, keep items in stock, make it easy for the consumer to find what she wants and provide value for the money spent. These have not changed.

Why try to put the blame on Amazon, Apple, Facebook and Google? Retailers who are having problems should first look in the mirror and then return to basics and find ways to adapt. Otherwise, they should not be in business.

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Max Goldberg, President, Max Goldberg & Associates

There may or may not be a confusion of tenses in these questions since one has a clearly demonstrable reference point ("...has had...") and the other asks us to look into a future when any or all of these companies may be eclipsed by a player who may or may not have emerged yet.

So let's start with the former question, which at least has an answer. Amazon has made the phrase "traditional retailer" obsolete so I guess they have to be the clear winner even if you combined the impact of Facebook, Google and Apple.

Yes, people find retail opportunities on Google. And, yes, Facebook will no doubt pursue more commercial opportunities but neither company "has had" the same impact on retailing that Amazon has.

As to Apple -- it's a single brand whose ability to command a significantly higher price point than its competitors depends largely on it maintaining a style cache and limiting retail distribution. And, yes, yes, the Apple Stores are cool -- but that's the point -- "cool" rarely scales.

So, optimized, Apple at best defines a profitable niche in the future.

That leaves the other three players and -- at the risk of breaking my own rule about the foolishness of making predictions -- it seems that for the foreseeable future (say, five years) the winner will still be Amazon.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Amazon pretty much wrote the book (pun intended) on online retailing and their presence and market share sets the standards for online shopping. In terms of who's a retailer and who's not, Amazon is obviously our man in the field. Apple, being a producer of retail sells has also had a hand in standards with The Apple Store. They have set markers when it comes to pre and post sale service. Facebook and Google represent the marketing end of things. Those are tools that retailers can use to promote their brand. Overall, I would say Amazon had the most profound affect on retailing in general while Apple has made strides at the bricks and mortar level.

Doron Levy, President, TheMortgageMachine.ca

All four have had significant major effects on retail. It is difficult to select the one having the most influence. Certainly a case can be made for all four. But push me to the wall and I will select Amazon because of the competitive influence it has made on the industry. Certainly Apple and technology has been extremely important. Recently Facebook has flexed its influence. But there is always Amazon with the competitive piece forcing retailers to take notice.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

This is a seriously difficult choice. All four have changed the way people shop and the way they get information, but I've got to give it to Apple.

Amazon disintermediated the store. Facebook has/will enable retailers to get their arms around customer sentiment. Google was just sort of life changing for everyone, enabling the kind of price and product transparency that Mobile completes. So in the face of all of that, one would bemoan the future of the store. But along comes Apple and shows that it is indeed possible to have a differentiated and profitable in-store experience -- even WITH a lot of payroll.

I understand people think Apple has a small assortment, but that's not entirely true. There are lots of accessories for sale there as well. I believe if retailers stop thinking of the Apple store as an anomaly, they will find a nugget of value for their own in-store experiences. And that will transform retail over the next 5 years. Amazon, Facebook and Google have brought us to today. The Apple Store experience will bring us to our future.

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Paula Rosenblum, Managing Partner, RSR Research

It's hard not to simply select "D: All the above," but I think Google has probably had the most significant effect on retail.

Retail is no different than any other field in which more and more influence has moved online in the last decade. Customers shop online, talk online, search online and everyone communicates online.

Amazon is hands down one of the largest online influencers for retail, but one platform that has allowed this was created by Google. Amazon may turn up most often in your search results, but it's Google's "secret sauces" that allow this.

Out of these 4 organizations, Google has produced more changes and improvements to the online world that we all communicate in, conduct business in, socialize in, shop in and rely on.

Jason Williams, President, JAWBRAIN Marketing

I agree with Kevin Graff -- Amazon has had the most influence to-date, but Google has the most potential in the future. In the mid-term, I think we'll feel the Apple push. I've already heard too many retailers say "I want my store to feel like Apple." So I don't think Apple's done with us yet.

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Nikki Baird, Managing Partner, RSR Research

Amazon and Bezos by far and had more impact on retail than anyone in recent history. From a customer loyalty perspective, they've done more than probably anyone since Nordstrom to orient the business around customers and create an epic competitive advantage based on this overarching strategy.

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Phil Rubin, CEO, rDialogue

There are rules?

These four are all game changers, no doubt about it. And who can say one is more significant than the other? That's like saying your foot is more significant than your thumb.

The lesson I think is this: 95% of everything we need to know in retail (or in any business) can be found outside of retail. If all you do is focus on how traditional retailers do traditional retail, then you will perpetuate traditional retail. Get an insight from how art is created and marketed or from how the root systems of a rare plant works or from studying the pervasive role of subtle energies -- you will change the world.

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Ian Percy, President, The Ian Percy Corporation

I don't think there is any doubt. The answer is all of them in their own way and each of them or the companies they created will continue to be a dynamic force in changing the way the world shops, learns, grows, and interacts.

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Mel Kleiman, President, Humetrics

It is not the Apple Store that puts Steve Jobs on the list. It is iTunes. It revolutionized the thought process of buying anything. Consider how the music industry went after Napster. They thought they won. Put Napster out of business so people would continue to buy music on CDs at retail.

Jobs observed the very same phenomenon that the music industry saw, yet he said, why do we need CDs? Why do we even need retailers? That understanding led to everything that followed at Apple. The Apple store is only a side show to give all of us the ability to connect with whoever we want, wherever we want. The domino effect of iTunes can be seen in today's smartphones.

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Gene Detroyer, Professor, Independent

The four companies have affected our lives in different ways. I don't believe a ranking of them makes much sense. They all leverage each other, as Apple can be the vehicle to deliver Google, Facebook and Amazon. They intersect in other ways, additionally. They all affect retail differently and as they expand further, the lines between them will continue to blur.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Amazon clearly has had a big impact on retail, but there is no better retailer today than Apple. In my judgment, it's not really close.

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Ted Hurlbut, Principal, Hurlbut & Associates

Amazon has definitely had a clear and direct impact to date on some specific retailers ... to the extent that some of its competitors have not survived. It has also had an indirect impact on many others. I would suspect that it will continue to be a strong influencer on the future direction of retailing.

I also believe that the others mentioned may still have their big impacts on retail ahead of them. Although I might speculate that only 2 of the 3 will deliver on this opportunity depending on who wins in the race for consumer relevance across all the battleground areas such as smart phones, shopping apps, e-wallets, "products finding me" etc.

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Matthew Keylock, Senior Vice President, New Business Development and Partnerships, dunnhumbyUSA

I think the answer looking backwards is Amazon. But going forward, you have to imagine that it's Google. The 2011 customer enjoys a fair amount of anonymity, but retail in the age of personal information aggregation will be wholly different.

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Cathy Hotka, Principal, Cathy Hotka & Associates

The waterfront has pretty much been covered by the previous comments re: this question. So, in my contrary way, please allow me to suggest a slightly different question: Why wasn't John Biggins, inventor of the first credit card issued by a bank, included in this discussion? Now THAT'S a non-retail influence on retail. And it's electronic, too, just like the other retail influencers mentioned here. Well, it didn't begin as an electronic application because it was 1946, after all. But credit cards embraced electronic application as soon as the technology was available, which was before Bezos, Zuckerberg, and Page were gleams in their fathers' eyes. (Jobs was born before electronic credit cards.)

And as for transforming retail, of course credit cards take the prize over Amazon et al, none of which could function without the ubiquitous plastic financial instrument. The CC is also the progenitor of smartphone purchasing systems and all debit and credit buying systems to come. So, let's hear it for John Biggins!

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

Steve Jobs, without a doubt. Because Jobs has developed consumer products, he has provided any retailer with a means of making additional profits. Bezos, Zuckerberg and Page have each caused change in retail thought and operations but have not created any product that a retailer can actually to sell to a customer. Jobs' products have resulted in the development of additional products like headsets, earphones, cases, power cords, and etc., that even no marketing entities like c-stores can sell. Bezos, Zuckerberg and Page are systems developers that have had little positive impact on retail sales. Jobs grew the business, the rest of these guys have provided no value to the retailer. Now Bezos, Zuckerberg and Page will have an impact on retail going forward. Bezos will cause even lower prices, Zuckerberg and Page will shift advertising and marketing expenditures and may even provide retail with a reduced swipe charge and other benefits that retailers weren't paying for anyway. But retail all boils down to selling something. If you don't have a revenue stream you can't save your way to success and my point is that only Jobs has really contributed to the revenue stream.

Ed Dennis, president, Dennis Enterprises

Clearly Amazon has changed the retail game now and for years to come: click here to buy -- long ago brilliant. While others have struggled with the complexity of becoming a middle man/mass online retailer, they had that vision from the start.

Most smart retailers already realize that it's Amazon, not someone with a store like theirs, that is the competition. But likewise, most of those smart retailers are way behind them. Feels like a good decade window of dominance coming up.

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Lee Peterson, EVP Creative Services, WD Partners

I think that Apple as had the most significant effect on retail. They continue to develop products, services and accessories that become in demand. These are items consumers never new they needed before, but now "How did they ever live without them?" Steve Jobs takes some of that credit, but I would expect it's a bigger team than just one man so I expect the trend to continue even in his absence. They will pull a lot of consumers through the retail doorway, both real and virtual.

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Jerry Gelsomino, Principal, FutureBest

Each of the four brands have earned their place on the short list. Rather than a winner, I prefer to suggest that Facebook has had the least impact on retail. The other three remain best-in-class in their areas of expertise.

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Christopher P. Ramey, President, Affluent Insights

To date, it's pretty obvious that Amazon has had the most significant effect. That said, any of the other three could be the answer for the future. Apple, if the continue their run, could be seen as the transformation agent -- turning the corner on m-commerce and eclipsing the previous world of e-commerce. Google seems to be a power of nature, and if they put their mind(s) to it could transform the entire nature of the whole retail process, both from customer and supplier side. And Facebook ... well, hard to predict what they might do, but with their dominance of social media they certainly have the opportunity to change the face of retail as well.

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Verlin Youd, Principal, VPY LLC

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