Three Things Entrepreneurs Can Learn From Amazon & Whole Foods

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source: https://www.forbes.com/sites/groupthink/2017/06/16/how-amazon-just-changed-the-800-billion-supermarket-world/#5e61101a6697

It’s now been 10 days since Amazon announced their acquisition of Whole Foods Market for a whopping $14 Billion. In that time, countless articles have been written analyzing the deal from virtually every angle. Here’s one more, this one focused on the little guy, the solopreneur. What can we take away from this mega-merger that might be instructive?

1. Don’t Be Afraid To Dial The Clock Back

For years, consumer companies have been finding ways to reduce employees and put more control in customers’ hands (think self-checkout). Amazon has now announced a willingness to reverse that model and reassert control over the food-buying experience in the name of greater customer convenience (who doesn’t want to be able to go grocery shopping in their pajamas?), and, perhaps more importantly, good, old-fashioned customer service. Similarly, you should also identify potential friction points in your business where your customers are actually more likely to request your help, expertise, or simply that you do it for them. In the digital age, the pendulum has swung back again from the Do-It-Yourselfer of the last 30 years to the Done-For-You provider model of our grandparents era.

2. Experiment, But Know When To Commit

The Whole Foods merger is just the latest in a long line of attempts by Amazon to revolutionize the way we buy food. Each iteration, from Amazon Grocery, to the drone delivery system, to the Dash button, was a refinement of the process. For the longest time, pundits scoffed at the idea that Amazon would ever outsource its core delivery business, or buy up another company to make the food ecosystem happen. But $14 Billion later, we now know something we didn’t before: Amazon wasn’t looking to shake up the back end of the grocery business, it was looking to modernize the front end. While the dust has yet to settle on what the new Whole Foods-Amazon behemoth will actually look like, we can say that a couple of things are apparent: Amazon is not aggressively targeting changes in the “center store” (nonperishable items usually stocked on the aisles in a traditional grocery store layout), where it already has market share, with things like the Dash button bringing you canned goods and non perishable items. Instead, Amazon is going back to its own past, and changing the way consumers view their grocery experience. From predictive data analytics to streamlining delivery, Amazon is aiming to do for groceries what it did for books: Become its very own Internet of Things. Once the braintrust at Amazon crystallized around the idea of connecting food and people in a new way, the pathway became clearer. Rather than experimenting with a new way of doing things, Amazon did what it does best (economies of scale) in a new industry. And it went all in immediately.

3. Know Your Customer Better Than They Know Themselves

Like I said earlier, the dust still hasn’t settled on this deal, so we don’t fully know the extent to which this merger will impact our daily lives. But one thing we can extrapolate from historical precedent: Amazon would not have made this leap if they didn’t have mountains of consumer data confirming it as a good move. Like Steve Jobs and Apple, Jeff Bezos and his online bookstore have consistently been at the forefront of identifying pain points and solving problems for their customers before the customers themselves are even aware they have a problem. (Note: This should not be confused with the tendency among some entrepreneurs to manufacture pain points or problems to validate their pet projects.) In this way, we can steal a page from the Amazon-Whole Foods deal and say this: customer data, knowing your customer, is the single biggest differentiator between success or failure, regardless of your market cap or number of employees. The good entrepreneur gives his customer what they need. The GREAT entrepreneur gives his customer what they don’t yet know they need, but soon will.

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