WholeFoods Magazine – A flywheel is a remarkable physics experiment but an even more remarkable business model. It’s one of the best kept secrets of Amazon’s success and other leading and disruptive companies are also using the concept. This article looks at ways to understand and adapt the flywheel business model to natural products retailers.
Other organizations have developed their own flywheel using a similar diagram. Take Uber for example, whose flywheel includes lower prices, faster pickups, more demand, more drivers, and more geographic saturation. The short takeaway is a simple and obvious conclusion that is routinely missed: No single action can be pointed to as the specific reason for success. Was it the first push on the massive wheel that created the movement that provided momentum? Hardly. In reality, it was the combined effort of the first, fourth, tenth, hundredth, etc. effort that created the momentum.
Creating an expertise of shared experiences by consumers can result in a greater feeling of community for your customers. According to a Nielsen report, 92% of global consumers say they trust recommendations and information from family and friends above any other form of advertising. According to Boston Retail Partners (BRP) 2018 Digital Commerce Survey, 75% of consumers use digital tools prior to their in-store visit and shoppers use mobile devices in 46% of in-store shopping experiences, so natural product retailers with an online presence can take advantage of this.
Put it into practice: Through word of mouth marketing stores can encourage, or incentivize, customers to find like-minded consumers and serve as ambassadors. Natural product retailers also have an opportunity to get involved in their community by participating in local events and hosting in-store education sessions. Celebrate the uniqueness of your location, culture, products and most importantly, your customers in-store and online. Work to remember names, provide perks, encourage demos, etc. Provide education information online.
The flywheel works as a business concept and model. Natural products retailers should think of their own operation, inputs, interactions and outputs. This article presents some thinking on the unique attributes for the development of any retailer’s flywheel. The reality is that no two flywheels should be the same. The Amazon flywheel is the cornerstone of the Amazon effect. A retailer’s success can be optimized and guaranteed by the creation and implementation of a custom retail flywheel to serve as the engine of the business.
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