Forums » Friday Polls

Friday Poll: What Should Merchants Do to Compete Against Amazon?

    • 1051 posts
    October 25, 2018 11:25 PM PDT

     Amazon is doing well these days. They're getting nearly half of all online retail dollars and almost 5% of all retail, period.

    Of the 126 million households in the USA; nearly 95 million of them have an Amazon Prime membership, with its signature benefits and incentives to buy: free 2-day shipping, easy no-hassle returns, free music, free videos, Alexa deals, etc. That is staggering market penetration!

    No wonder local entrepreneurs are setting up Amazon shops to extend their consumer reach. Even brick-and-mortar retailers are buying inventory for resale on Amazon, because the prices are better and they don't have to risk stocking too much inventory of price-volatile items like consumer electronics.

    They say they want to be the most customer-centric business on the planet, and they're walking the talk.

    Meanwhile, hundreds of retail stores have closed or are closing as Amazon and other online merchants get bigger and stronger.

    So, this week's Friday Poll Question is: What Should Local Merchants Do to Compete Against Amazon?

    Look forward to reading your answers in the comments below.


    This post was edited by Rod Schwartz at November 8, 2018 10:14 PM PST
    • 78 posts
    October 26, 2018 11:08 AM PDT

    This is a huge problem for media, not just radio. The smaller the community, the more profound the issue is. We really must include the national chain stores in the mix as well. The proliferation of Dollar General and Family Dollar going in to communities is contributing. We have all seen what Walmart has done to the mom and pop small town business. When you add it all up, that local mom and pop storefront has seen the line between profit and loss edge closer and closer together. It is a trend I do not see going away.

    To counter, we need to change the minds of the consumer. For radio, I believe it is about education,not only for the listener but the client. Part of the problem is the local merchant that will not advertise. All of us know awareness builds business. Merchants need to stay top of mind with the local community.

    For the consumer, understanding how spending locally with that local business benefits them beyond the purchase. Local merchants offer jobs, pay taxes, support local services like the volunteer fire department and EMS. They support the kids in school projects. They use those dollars spent to benefit to the local quality of life. I do not have have a study before me, but I recall a dollar spent with a locally owned merchant comes back to the community in a sum that is triple the amount the national chain outlet in the town contributes. Online sales contribute nil.

    Consumers need to understand convenience is another factor. You might be stuck with a lengthy and costly visit to another town for basic needs if the local merchant is not around. Having started in small town radio, nothing beats a 30 minute drive to grab the one item you forgot to get on your grocery shopping list. 

    To counter, we have used a series of spots designed to spell out the advantages and consequences of not shopping locally owned merchants. We point out the few pennies you save cost dollars down the road. To encourage financial participation, we use merchant voices to drive home the points as well as those responsible for the local infrastructure. We explain to merchants their participation is needed to benefit not only them but their customers. Merchants need to be taught because you've been there forever, that's not good enough in today's world. 

    We also talk about community pride and the neighborly facets of the community as well as the quality of life enjoyed. These qualities only exist in healthy communities.

    Radio adds to the problem in some cases by only thinking radio. We need to think of radio as being where the listener is. That means Facebook, etc. I have been told Facebook is today's radio station request line. In short radio needs to strive to be more lifestyle in scope and in marketing. If you have no online presence to add to listener's and merchant's value you need to think differently.

    Merchants need to understand marketing better. For most every storefront, the customer lives within only a few miles of the front door. Advertising in that shopper that reaches 3 counties wastes so many ad dollars reaching those that will never become their customer. Merchants need to understand geographic reach for most is only an opportunity to spend more for less.

    One small town station I worked for hosted a gathering for community merchants in coordination with the rival station and the local newspaper. We set up rules to define the mission of the gathering: to educate the merchant and others about the importance of supporting community. Only local media was invited but we agreed regional media could come if they heard about it and wanted to be involved. None did. We were not allowed to make negative comments about other media but only center on the positive. Our competitors were skeptical but all three joined us, the chamber hosted and we were able to present a professional presentation that was well attended. We all picked up new business. We all got along. We all left our mud back in the office to sling later.

    We came away with a more cooperative relationship with local media, not less competitive but more focused on being the most effective for the merchant.

    I have looked at a good number of small markets. I have seen a loss of about 2-3% annually in local merchant spending annually. Add in cost of living increases to make this more dramatic. The local newspaper likely has it worse. The loss in revenue has led to cuts in staff, a loss in content and a diminished readership. In 14 years one paper serving a county of 4,500 saw readership go from  1,200 to 800. The worst I saw was a paper cutting it's size by 50% in content going from 418 to 241 readers and revenue going from $62,000 to $28,000 in 8 years with the most dramatic loss being the year Dollar General and Family Dollar opened stores across the street from one another.

    For radio it's not that drastic but we need to be as lean and inventive as we can to get by on less without diminishing the product we offer. Our sales effort needs to be as finely tuned as possible to be effective in making diminishing ad budgets work better.

    • 55 posts
    October 26, 2018 12:21 PM PDT

    Merchants must adapt and survive.

    It's easy to one-up Amazon's customer service simply by being there and being knowledgeable. The problem is, a lot of local businesses just don't know how. (Back when I was working inside a station, I would periodically try to do business with our advertisers, and often found the experience to be anywhere from sub-par to awful. Those experiences did not bathe me in comfort re the messages I was putting on air.)

    The other thing that merchants can do is become specialists. That scares a lot of advertisers who want to be everything to everyone. But such a position is impossible. In some cases, becoming a specialist is merely an exercise in branding. In other cases, it requires evolving the business model. In town, we have a local bookstore that does really well by being locally focused, having regular events, and earning the customer's business. We also have running, cycling and outdoor stores here that crush Amazon (as well as the local brick & mortar competition) because they are specialists, they also have events, and they, too, earn the customer's business. 

    For the radio pro, understanding how to brand a business on air and how to focus the message is part and parcel with all this. Surviving Amazon isn't rocket science. But it does require an effort and a desire to do better. 

    • 3 posts
    October 26, 2018 12:49 PM PDT

    I think local businesses need to really focus on customer service. Being there for their customers, answering the phone at their business, being seen at local events. Amazon cannot do those things. There is not a face with Amazon, there is with your business. Also I think small businesses need to rethink the hours they are open. 9 to 5 is not convenient for anyone that works a normal job. Maybe opening later and staying open til 7 pm would be an option.

    • 14 posts
    October 27, 2018 1:19 PM PDT
    Bill Turner said:

    This is a huge problem for media, not just radio. The smaller the community, the more profound the issue is. We really must include the national chain stores in the mix as well. The proliferation of Dollar General and Family Dollar going in to communities is contributing. We have all seen what Walmart has done to the mom and pop small town business. When you add it all up, that local mom and pop storefront has seen the line between profit and loss edge closer and closer together. It is a trend I do not see going away.

    To counter, we need to change the minds of the consumer. For radio, I believe it is about education,not only for the listener but the client. Part of the problem is the local merchant that will not advertise. All of us know awareness builds business. Merchants need to stay top of mind with the local community.

    For the consumer, understanding how spending locally with that local business benefits them beyond the purchase. Local merchants offer jobs, pay taxes, support local services like the volunteer fire department and EMS. They support the kids in school projects. They use those dollars spent to benefit to the local quality of life. I do not have have a study before me, but I recall a dollar spent with a locally owned merchant comes back to the community in a sum that is triple the amount the national chain outlet in the town contributes. Online sales contribute nil.

    Consumers need to understand convenience is another factor. You might be stuck with a lengthy and costly visit to another town for basic needs if the local merchant is not around. Having started in small town radio, nothing beats a 30 minute drive to grab the one item you forgot to get on your grocery shopping list. 

    To counter, we have used a series of spots designed to spell out the advantages and consequences of not shopping locally owned merchants. We point out the few pennies you save cost dollars down the road. To encourage financial participation, we use merchant voices to drive home the points as well as those responsible for the local infrastructure. We explain to merchants their participation is needed to benefit not only them but their customers. Merchants need to be taught because you've been there forever, that's not good enough in today's world. 

    We also talk about community pride and the neighborly facets of the community as well as the quality of life enjoyed. These qualities only exist in healthy communities.

    Radio adds to the problem in some cases by only thinking radio. We need to think of radio as being where the listener is. That means Facebook, etc. I have been told Facebook is today's radio station request line. In short radio needs to strive to be more lifestyle in scope and in marketing. If you have no online presence to add to listener's and merchant's value you need to think differently.

    Merchants need to understand marketing better. For most every storefront, the customer lives within only a few miles of the front door. Advertising in that shopper that reaches 3 counties wastes so many ad dollars reaching those that will never become their customer. Merchants need to understand geographic reach for most is only an opportunity to spend more for less.

    One small town station I worked for hosted a gathering for community merchants in coordination with the rival station and the local newspaper. We set up rules to define the mission of the gathering: to educate the merchant and others about the importance of supporting community. Only local media was invited but we agreed regional media could come if they heard about it and wanted to be involved. None did. We were not allowed to make negative comments about other media but only center on the positive. Our competitors were skeptical but all three joined us, the chamber hosted and we were able to present a professional presentation that was well attended. We all picked up new business. We all got along. We all left our mud back in the office to sling later.

    We came away with a more cooperative relationship with local media, not less competitive but more focused on being the most effective for the merchant.

    I have looked at a good number of small markets. I have seen a loss of about 2-3% annually in local merchant spending annually. Add in cost of living increases to make this more dramatic. The local newspaper likely has it worse. The loss in revenue has led to cuts in staff, a loss in content and a diminished readership. In 14 years one paper serving a county of 4,500 saw readership go from  1,200 to 800. The worst I saw was a paper cutting it's size by 50% in content going from 418 to 241 readers and revenue going from $62,000 to $28,000 in 8 years with the most dramatic loss being the year Dollar General and Family Dollar opened stores across the street from one another.

    For radio it's not that drastic but we need to be as lean and inventive as we can to get by on less without diminishing the product we offer. Our sales effort needs to be as finely tuned as possible to be effective in making diminishing ad budgets work better.

     

    • 1266 posts
    October 27, 2018 5:51 PM PDT

    From Mike Horne: We are running Shop at Home ads and editorials to help support our local businesses and have received positive feed back and perhaps caused some people to decide to by locally instead of on line. It is the biggest problem our customers face.

    • 12 posts
    October 29, 2018 1:58 PM PDT

    I agree this is going to become a bigger and bigger issue moving forward,  and that the online / Amazon juggernaut isn't going away.    Just wondering if anyone has sample scripts or produced "shop local" ads they might be willing to share.

    James

    • 78 posts
    October 29, 2018 2:32 PM PDT

    When driving place to place on the highway I listten to radio and grab local newspapers. I'm looking for inspiration.

    Not quite 2 years old is The Abernathy Advocate near Lubbock Texas. Lots of pages of non-traditional pages of ads saluting students for achievements. On the page of business cards was this:

    Aesop's Fable still holds true:  Bigger isn't always better.

    One of the fables talks of a dog trotting home with his prize bone but along the way sees a larger bone in the reflection of a stream. In trying to grab it, he loses the prize bone he had.

    The fact: Many of us today are still risking losing some of the good things we have by reaching for a tempting offer outside our community.

    By shopping elsewhere for that bigger bone we seriously undermine the economic structure that supports our schools, churches, businesses and everything else that makes our hometown a great place to live and work. Our community could enjoy greater prosperity and many more social and civic activities if out-of-town spending were kept in our economic bloodstream. Shop at home. Don't be a victim of a 1,300 year old fable.

     

    • 1051 posts
    November 8, 2018 10:21 PM PST

    Some great thoughts and suggestions here. One thing I might add is that local merchants ought to be thinking of ways to make shopping FUN for their customers. Costco does it with their sampling programs, road shows, and $1.50 hot dogs. We used to have a menswear store in town whose proprietor always offered chocolates to customers when they came into the store, and had a pop cooler full of Nesbitt's Orange soda (which he sold at cost). And he made an effort to engage each visitor in friendly banter. So, going into his store was typically an enjoyable experience. Surprise and delight keep customers coming back. That human touch goes a long way.