go where the profits are, not where the volume is. You’ve already gone where the volume is. How do we keep you from destroying your most profitable customers? Because your website’s going to do that. That’s the big message,” says Schreck. “Amazon has brilliantly confirmed that they will be the No. 1 through No. 100 retailer. I don’t know who’s going to compete with them [on net margin]. So the answer is, you better stop making your website look like Amazon’s.”
I pressed him a little more on this. “Amazon has nailed the directed purchase side of the business. They nailed it, it’s brilliant, I love it. But it has nothing to do with this impulse-driven, event-driven, non-price-promotion-driven stuff, which doesn’t really exist on the net. And in offline sales, that’s the majority of the revenue, and the vast majority of profits,” he says. “You’ve got to create an experience that leverages all of the offline merchandising creativity, the frictionless elements of offline, and then add the benefits of online—instantaneous, touch, immediate satisfaction, price confidence. You add those two things together, you actually get a better experience. That’s the goal, this will be the best experience of shopping. Even better than going to a store, most of the time.”
How will a company like Amazon continue to innovate in commerce? “I looked at Amazon’s website in 2000, and compared it to 2012, and it’s stunning how little it’s changed. It was brilliant then, and it remains brilliant today. Because they’re able to fulfill on the promise of price-competitive and efficient distribution, I use it every day. You don’t need to make that experience any different or any better,” he says. “But I’d build something more compelling than the Kindle Fire. If they’re going to this space where rich media and merchandising plays a role, then doesn’t it feel like the devices that you’re subsidizing, the Kindle Fire in particular, would have more of a shopping interface? That’ll be interesting.”
Which brings up the final question of how tablets and screens will evolve from here. “From a marketer’s point of view, there is a convergence, and it looks a lot more like a tablet than a PC. Whether we’ll all have two screens or three screens, I’m not sure,” Schreck says. “Once we have legitimate competition in the tablet space, which we clearly don’t have today, you’re going to see increased innovation around that. It blows my mind that the [new] iPad doesn’t look any different from the iPad 2. I think if they’d had real competition, that would not have happened. When there’s real competition, everything will end up looking like a tablet [with different screen sizes, thicknesses, processing power, etc.]. That’s where, I think, in five years we’ll see something interesting.”
