HGGC Tackles the Amazon Factor
As a private equity firm that helps companies to grow, HGGC deals with a lot of issues that can inhibit company growth. One of these issues that came up last year was the Amazon factor. Simply put, Amazon has revolutionized the way that commerce is done, and one unintended consequence would be that companies have to compete with that. Naturally, HGGC has the foresight to address this, and they did so in a recent interview.
First of all, Axial CEO Danielle Fugazy sat down with HGGC CEO Richard Lawson to get his recommendations on how companies can adapt to compete with Amazon’s business model. Lawson provided a lot of insights, including the suggestion that rival companies should do everything in their power to protect their market share. One of the ways to do this is to provide 24/7 access to their products. Lawson was proud to note that his company led the way by investing $154 million to become a controlling partner in MyWebGrocer (MWG). This company partners with traditional brick-and-mortar grocery stores by allowing patrons to shop at all hours of the day and get the groceries delivered. This firm realizes this is one way to take on Amazon, but it is not the only way.
HGGC also realizes that another way to compete with Amazon is to understand their selling model. One of the most common characteristics about Amazon’s stock would be the concept that they sell “everything and nothing”. Simply put, this means that Amazon will usually not devote themselves to unique brands but simply sell the most common stuff. This is one of the reasons why Richard Lawson’s firm often advises their clients to sell as many items as they can within their niche. For example, those that sell baby products should keep specialized items that work that better match with babies that have certain characteristics, such as allowing for allergies, providing items that are chemical-free, and items that are safe or organic.
Lawson and the rest of the professionals at HGGC realize the importance of utilizing many different tactics in order to take on the Amazon behemoth. If you are an executive at a company that rivals Amazon and wants to know how to compete, the staff at HGGC wants to talk to you. Simply put, they make money when you make money.