Is Amazon a Threat to Small Business? It depends on who you ask. A report from the House Judiciary Committee (opens in new tab) Wrongly accused the company of “causing harm”[ing] competitors” and possessing “monopolistic power over many small and medium-sized businesses” – claims the company sought to vehemently refute.
But despite small businesses’ monopoly concerns, there’s one big advantage Amazon offers everyone: a powerful example. From being founded in a garage in 1994 to its current market cap of over $1 trillion, Amazon has adhered to several business principles that all small businesses should emulate.
1. Thematic integration around the client.
Amazon has more than one million employees and dozens of subsidiaries across multiple verticals – but a simple and clear mission that hinges on the customer. according to the company (opens in new tab)“Amazon strives to be Earth’s Most Customer-Focused Company, Earth’s Best Employer, and Earth’s Safest Place to Work.” Unique customer-centricity (and Web retail dominance) were part of Jeff Bezos’ vision for the company long before anyone could have thought it realistic, but the lesson for small businesses shouldn’t be overly aspirational: It’s important to focus on your overriding focus. Be clear about it and stick to it.
As Amazon grew, a clear thematic focus and relentless customer-centric attitude allowed disparate teams around the world and across business sectors to align with and support each other. Small businesses, even more so than Amazon, cannot afford to put resources at cross purposes with each other. Thematic integration provides a framework for all players in the business to make the right decisions for the company in the long run.
Businesses of all sizes necessarily spend a lot of time thinking about near-term goals and strategy. But every business should also have a clear overarching mission. And, like Amazon, every small business must put the customer at the center of that mission.
2. Diligent building of relationships.
A certain aspect of our current economy is often referred to as the “subscription economy”. Recurring monthly payments – your razor blade refills, streaming services and automatic dog food delivery – are really the pieces Relationship Economy (opens in new tab),
As such, Amazon’s customer-centricity goes beyond simply providing a better service at any given time. The company thrives by paying careful attention to the entire customer journey and carefully fostering comprehensive relationships with each of its customers. The result, in Amazon’s case, is knowing what you want before the company thinks you want it.
The strength of Amazon’s customer relationships may seem impossible for small businesses to match. But in emulating Amazon’s commitment to creating a complete customer journey and relationship, small businesses will find that they have valuable assets that Amazon can’t match: a true community presence and an enormous amount of goodwill that can be found locally. arise from the alignment of interests and power. Real person-to-person relationships.
With the deployment of simple tech tools, small businesses can build nurturing sequences that help build stronger customer relationships than Amazon.
3. Continuous integration and activation of data.
Data is the great enabler of much of Amazon’s success. The company not only collects massive amounts of data, but also organizes it effectively and applies it to widely different business areas. This allows it to routinely take data from any corner of the business, such as online retail, and apply it to a different corner of the business, such as a fulfillment center.
Small businesses may collect several orders of magnitude less data, but they still have more data that they can track in a spreadsheet and meaningfully deploy. Modular, no-code data platforms can help them effectively organize and integrate their data, while intelligent automation interfaces can seamlessly put that data to work across the business. Amazon will never leave the value of data on the table, and neither should a small business.
In the near future, true artificial intelligence will help bridge the gap between data-rich and data-poor companies, by reducing their reliance on vast data troves in the first place. When that happens, small businesses that are well positioned with organized, integrated data will be in the best position to succeed.
This article represents the views of our assistant advisor and was not written by Kiplinger’s editorial staff. You can view the advisor’s record with the SEC (opens in new tab) or with FINRA (opens in new tab),