I bet the grocers that had a bad day when Walmart got into groceries about fifteen years ago are having a really bad week now that Amazon has announced their intention to buy Whole Foods. The innovations Amazon is going to bring to grocery buying go well beyond low price and internal operational tweaks. Amazon is going to use technology to transform the grocery buying experience, and the old competitors focused on their tired, old, internal metrics will be toast.

 

Marc Andreesen, a famous internet entrepreneur and venture capitalist, once said: “Software is eating the world.”  You can read his editorial in the Wall Street Journal here.  It’s true.  Customer service innovations driven by software are transforming every industry.  Netflix to Blockbuster.  Uber to taxis.  Amazon to booksellers, hosting companies, and now grocers.  When will it be your turn?  Which side of the statement will your company be?  The eater? or the eaten?

Do you suppose the first innovation Amazon is going focus upon is how Whole Foods does accounting?  Is that where they are going to put their innovation muscle?  I ask the question because it seems that accounting remains the first priority of service contractors when they think about how to apply technology to their business.  But it sounds really silly in the context of the Amazon acquisition of Whole Foods, doesn’t it?  As I have said before, your perfect accounting process is perfectly irrelevant to your customer.  You should have a good one, but it will not save you from an innovative, customer-focused competitor.

I am not going out on a limb when I say that Amazon understands that accounting is irrelevant, and their focus with Whole Foods will be transforming how customers buy groceries.  They will eliminate aggravation and uncertainty for the customer through technology.  I bet there will be an awesome mobile app for pricing your groceries in the aisle and eliminating the checkout line.  I bet you will use that app to find the groceries you seek without wandering up and down the aisles.  I bet you will get interesting recipe ideas based on the ingredients you buy often.  I bet your buying preferences will lead to deliveries to your house via drone for the items you buy on a regular basis.  I bet the best customers with the most money to spend on groceries will gravitate to Amazon and their innovations. I bet I cannot even imagine the things they will do to make grocery shopping more convenient, and none of it will relate to how they do accounting.

So when will it be your turn?  Will you be the eater, or the eaten?  Are you considering how to upgrade your customer’s buying experience with your services?  Or are you piddling around with how to extend your accounting to wring a small bit of extra margin from your internal processes?  Are you building an innovative and growing brand that attracts customers to you?  With an experience that they cannot easily trade for the low price guy? Think about it.  Who do you want to be in your market?  Amazon, Uber, Netflix?  Or the other guy?

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