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Amazon Effects on Your Local Bookstore: Competitor or Teacher?

Aug 19, 2008
The current economy is being effected by a number of different factors and businesses of all shapes and sizes are feeling the effects. A trend that has effected many retailers, in combination with the general downward slide of consumer spending, is the adjustment to online retailers, namely Amazon. I will focus on Amazon being that as of the close of 2007 it held the title of the world's largest online retailer with close to 15 billion in annual sales. The way in which traditional retailers use the technology that has now become commonplace is a determinate of their future success. A clever retailer will incorporate these new technological tactics rather than cut his or her losses.

In 1994, former financial analyst, Jeffery P. Bezos founded Amazon.com, an online bookstore. The company quickly expanded its product line to sell electronics, cds, movies, children's toys, household items and even groceries. Today, Amazon and it's partners sell virtually any item from fine jewelry to sports equipment. As of 2006 it sells digital copies of CDs, DVDs and Books. Amazon Unbox allows customers to download these products to their computer or certain TiVo boxes. In 2007 the company introduced Amazon MP3 store and the Kindle. Amazon MP3 is similar to Apple's iTunes making downloadable music available. Kindle is an electronic book reader and the first electronic device to carry the company's own brand. Amazon also rents out parts of its back-end infrastructure to other companies, positioning itself as a technology company, Amazon Web Services.

Amazon's growth has been slow and steady. The company did not profit until 2002. Although the company has shown a net profit in every year since 2002, as of the close of 2007, Amazon had a net cumulative deficit of over 1 billion dollars. Amazon's growth is the result of a solid progression that adds levels and products and merchant partnerships. The culmination of these business aspects results in consumer and merchant positive name recognition alike.

In this respect, I think that Amazon took cues from traditional retailers who are successful, slow and steady. This is a direct contrast to your lightening fast overnight internet success story which was the dream of so many dot bomb participants. So, it stands to reason that if the iconic company of the internet era took a traditional retail approach to solid success that a solid traditional retailer could greatly benefit from incorporating some of the technological strategies of the Internet store.

The speed and convenience of an online purchase is hard to pass up. But retailers will always have the advantage of atmospheric dynamics. People like to peruse and touch and feel. They need the hands on experience and inspiration of the store setting, smells and other people. In this day and age it is the responsibility of the local retailer to incorporate technological functions tot his atmosphere in order to stay in the game.

Three areas that are greatly affected by technological advancements are Input Supply, Advertising and Promotion and Sales and Marketing. Business owners can easily gather information about input sources for production and or service activities. This translates to both lower costs as well as less time spent.

Business owners can promote their products and services using Web and email based advertising. These methods of advertising are both far reaching and inexpensive. These methods are beneficial regardless of how remote the business location may be.

Market research is also expedited using new technologies. Business owners are able to investigate how their competition is positioning their products. Sales and customer service activities can also be vamped up to include online options. Internet purchasing is safe and product support is expedited via fax and email capabilities.

A trend that has effected many retailers in combination with the general downward slide of consumer spending is the adjustment to the presence of online retailers. The way in which traditional retailers use the technology that has now become commonplace is a determinate of their future success. The connection between a purchaser and an inspiring or familiar setting with products that can be touched should not be underestimated. A clever retailer will incorporate these new technological tactics rather than cut his or her losses.
About the Author
I have an extensive background in Finance and Fiscal Procedure. I also have a web business where I offer Educational Computer Software and Games. I am very interested in the product itself as well as the subject matter that it involves. Educational Computer Software and Games Please visit us at http://www.TheSoftwareSpot.com!
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