Amazon.com versus the World

Those of you who have attended our seminars and workshops know that one of my favourite companies in South Africa is Exclusive Books. Apart from the fact that I am a book lover, and I love the feel and smell of books, the physical environment in each store is very different from those of Exclusive’s competitors, with soft chairs and coffee lounges, and clear signs that tell you where everything is.

And the people are really nice. For example, if you spend a lot of time browsing at Exclusive Books, nobody will come up to you and reprimand you for reading the books before you buy them. The people who work at Exclusive Books seem to be more motivated, better informed, and more sensitive to customers needs. They really try hard to get a book that’s not in stock for you, and offer alternatives when they cannot.

And, of course, as a member of Fanatics, ( the frequent-buyer reward programme,) I get vouchers for spending on more books, as well as a package of other benefits. That’s worth an immediate 5% discount – yet another reason to remain a loyal customer. Exclusive Books have also made the process easier by allowing me to get my rewards without my membership card, and they also remind me when my vouchers are about to expire. In short, I love this business.

And yet I recently noticed that I have come to the point where I buy more books from Amazon.com than from Exclusive Books. For someone who is old-fashioned about rewarding those that do nice things for me, why would I do that? Because Amazon have managed to create a different, convenient, cheaper and – dare I say it – better experience for me.

When I get onto the Amazon home page, I am welcomed with “Hello, Aki.” My home page includes a few dozen recommendations based on items I already own, and also includes new releases, and “coming soon.” If I click on a book, then I can look inside and read a lot, I can read reviews from other people who have bought the book, (together with an easy to understand star rating system,) and easily write my own review. I get to see what other books people who bought this also purchased, and also view the books I have recently browsed through, even though they weren’t previously added to my wish list.

And then, on top of that, the price is lower than the listed price, and I can purchase a used copy for even less. Oh, and I forgot to mention that I can buy millions of different items over and above books, and have them delivered right to my doorstep.

How do Exclusive Books compete with that? Not very well, I’m afraid, and it’s understandable because they don’t have the resources of an Amazon. There is little or no personalisation nor “my home page,” and, for example I have to wade through a whole bunch of irrelevant – albeit popular – books to find what I want if I don’t use the search feature. The prices are almost the same as in the stores, there are no used copies offered, and reviews are minimal because the SA book buying population is so small. The website is also comparatively slow.

It makes me sad, and I will keep supporting “the little book store that could” when it’s convenient, but in my busy life there is scarce time to actually get into my car and go to the mall to browse.

The world of business has changed, and there are many other good and customer-focused businesses that need to find different ways to compete – or close their doors.

How can they do this? Let’s look at the Exclusive Books case study again. Amazon.com is certainly not a perfect business, and it is well known that they don’t deliver to South Africa without customers incurring considerable delivery costs. (The main reason is because they had one bad experience too many with SA Post Office employees stealing customers’ books.) Instead of plodding along trying to compete with Amazon, Exclusive Books executives could negotiate an affiliate deal in which they partner with Amazon and take care of deliveries in SA – and the rest of Africa. Thus the local company gets to partner with the best in the world, and uses its local knowledge to create value for all stakeholders. Of course, it does mean that the traditional model needs to be dropped, in particular the high mark-ups currently in operation, and the distribution through physical stores in malls.

Alternatively, they could come up with an added value customer model that is so vibrant that customers would not think twice about the time and money sacrifice they make to shop there. The soft chairs and coffee shop is a good start, but it’s just not enough. How about Exclusive Books becoming a party venue for kids parties – complete with entertainers who told stories in a way that developed a love of reading in children? What if they could use a crowd-sourcing model to make books cheaper and cheaper the more customers expressed interest in buying them? And wouldn’t they sell more books if more people could read in our country and on our continent? And what if you could drop off your electronic reader and they would load a whole bunch of stuff for you that you paid for only when you read it? (This pay as you go option is available already for cell phones, electricity and even car insurance, so it’s not that weird.)

These may be silly ideas but some seriously innovative strategies are necessary to survive, and I hope they can do whatever it takes to do these things. I would be devastated if the only place I could buy books would be on the internet.


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