Disruptors Only Disrupt Bad Business

As companies continue to fall victim to giant online retailers like Amazon, Zappos and other entities, let me caution you: Amazon isn’t killing them. When it comes time to point fingers, the only one to blame is the leadership of the company being disrupted.

Filling in for a regular radio host on WHO Radio in spring of 2018, the topic came up about giant companies like Amazon putting other smaller retailers out of business. I’ve spoken about this quite a bit, writing numerous articles on it, but my response got a really strong reaction. “Amazon didn’t put your retail business, out of business” I stated. Companies like Amazon simply “put businesses out of business that were already dying!”

The truth is, online retailers are not likely to disrupt businesses with great outstanding service. Online companies exist because they see opportunity in the form of bad service, poor selection or lazy leadership. Otherwise, they wouldn’t get into the game.

Hopping into an Uber in San Francisco, I listened to my driver explain to me how awful Taxi service was before Uber entered the market. As lifelong San Francisco resident, he recounted how it wasn’t uncommon to call in advance for a cab to get to the airport only for it to simply never show up. It was a problem, and when entrepreneurs see a problem. They fix it.

Uber was made possible by awful Taxi service. Pure and simple. If taxi service was great, no one would even bother giving Uber, and now Lyft a chance. People don’t like change if their current solution is already working, especially to distant, faceless online retailers.

Consider how iTunes disrupted the music industry in 2004. Some production houses and artists would force patrons to buy an entire album simply to get one hit song. Napster was how young people revolted, showing a proof of concept that people only wanted single songs. The record companies ignored the trend, and Apple monetized it. iTunes didn’t destroy record stores, the record industry did.

The same exact story is true for every “disruptor” and will continue happening. Macy’s and Younkers were once the disruptors, taking out “the little guy” and now they’re gone, falling victim to the same exact cycle.

There’s a hardware store down the street from wear I live. They haven’t announced plans to go out of business, but I’m telling you right now they’ve only got a few years left in them. When they go out of business, locals will hang their heads and say “what a shame” as they blame the nasty online retailers for taking them out. They won’t blame their extremely poor hours, dirty stores, poorly trained employees or lack of product.

There is plenty of room for corner-store retailers to thrive, and not just restaurants. Retailers like Raygun in Des Moines are thriving by listening to their community and responding lightning fast to consumer trends and hyper-local themes. When local University was nationally mocked for their “D+” campaign, the local T-shirt shop, within only one day was already printing D+ Student t-shirts responding to Tweets of their consumers.

The way to stay ahead hasn’t changed one single time throughout all of known history. Online retailers are still at a big disadvantage in many ways.

Firstly, listening to your consumers intently always has been a winning strategy, and those who get good at it, know what they want better than they know themselves. Second, the corner store still has the edge on the #1 thing all of us want. Instant gratification.

Online Retailers Aren’t Killing Your Business

(Originally recorded on WHO Radio April of 2018)

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