BURR RIDGE, IL – Why does the recent news about Amazon come as any surprise? The writing has been on the wall for a long time. After starting with books, look at what they did to so many industries that cover just about everything that can be purchased online, even groceries. Now they are entering the HME/DME and medical space and we, as an industry, are caught off guard?
Amazon has been open with their objective to take away everyone’s margin. In fact, Jeff Bezos [Amazon CEO] has been quoted as saying, “Your margin is my opportunity.” For the most part, they will even sacrifice margins for market share in order to dominate the market and squash their competition. To some degree, some responsibility rests with the many HME/DME manufacturers that have allowed their products to be sold and bastardized on Amazon, which in turn has affected the regional and independent dealers who find it difficult to compete.
We should look at how Google and Walmart are combating Amazon domination to see if we can do something to stop this potential monopoly before it destroys the patient care process. The Walmart-led anti-Amazon coalition is joining forces with retailers such as Target and Home Depot to create a digital (i.e. online) replication of the in-store buying experience.
Let’s face it; Amazon is nothing more than a massive digital warehouse stocked to the brim with seemingly random items. They are not warm or personable, and they have no soul. They lack what you have, and understanding that may be the one thing that can unite the industry and give Amazon the resistance they deserve.
A great place to foster that unity will be Oct 15-17, 2018, at the Medtrade show in Atlanta. I encourage people to “stop complaining about Amazon,” but I also encourage people to stop complaining about Medtrade and instead get behind a show that is clearly changing and evolving to meet the needs of a DME work force that has seen a decline in its numbers. Medtrade is still standing, along with the HME survivors. The show makes everyone stronger.
As for the digital competition, I believe a smart strategy is to attack Amazon’s weakest vulnerabilities and double down on what Amazon cannot do. This industry has a competitive advantage when it comes to knowing patients, knowing products, and owning the personal relationship. You are in front of patients and have a much better understanding of their needs because it’s personal and not transactional. I do not want to oversimplify a potential solution, but it may come down to 1) having better HME/DME products selection than Amazon and (2) cultivating face-to-face relationships while offering prices that can reasonably compete with Amazon.
There are a number of things that you can do that will involve partnering with manufacturers and brands that protect online pricing with minimum advertised pricing (MAP) policies. These brands will value the face-to-face customer service that you provide to customers.
It also involves looking into new technology that will bridge the gap between your face-to-face interaction with patients and the online convenience of online shopping. I will be discussing some strategies at a Medtrade session called, Stop Complaining about Amazon. You have the Competitive Advantage, on Oct 17, 2018, and also at a Webinar for the American Association for Homecare Retail Working Group on August 9th. These discussions must involve manufacturers, brand owners, and distributors who are willing to partner with you and level the playing field. Remember, nothing is simple, and there is no magic bullet, but doing nothing is the worst option.
Kamal J. Haddad is CEO of Health Mobius LLC, Burr Ridge, Illinois. He will be leading an educational session at Medtrade, scheduled for Oct 15-17, 2018, at the Georgia World Congress Center in Atlanta.