Why Australian retailers need to change their thinking on Amazon
Amazon doesn’t have to be the enemy of Australian retail. If you play it smart, you can actually use its arrival to your advantage.
Cyclone Amazon is about to hit Aussie shores, and local businesses are hunkering down in preparation for its landfall.
But as the fear and hype around Amazon ‘stealing’ Australian business reaches peak hysteria, I can’t help but wonder if we all need to change our mindset. Amazon is coming, and there’s nothing we can do to avoid it. So, as the great adage goes, if you can’t beat ’em — join ‘em.
Amazon dominates online shopping across the globe. Last year, it made $136 billion in America alone, and boasts 310 million active accounts worldwide. Why? It’s fast. Like, deliver-to-your-door-in-two-hours kinda fast. It’s also cheap — the average delivery window is one business day, and shipping costs are negligible compared to the average online shopping platform.
So for online retailers in Australia, competing simply isn’t an option.
It is well known that the greatest strength to a business is adaptability. Retaining the flexibility to bend with the ebbs and flows of the market allows for resilience and therefore longevity. Those who refuse to change just end up being left behind.
Amazon does not have to be your enemy — actually, it could end up being your fulfillment partner.
Fact: Amazon Echo owners spend 10 percent more, and shop six percent more frequently, than non-Echo owners. So for Australian business owners, why wouldn’t you want a piece of that pie?
Like eBay or The Iconic, Amazon gives retailers the ability to sell their own products on an aggregated platform. Unlike eBay or The Iconic, however, Amazon has superior accuracy, speed and global reach. And it’s only getting bigger: Amazon recently asserted its market dominance by building a seven storey Amazon Echo in Times Square, New York (pictured above). Regardless of your industry, you now have the opportunity to leverage this kind of mega branding to help your own.
Of course, there are real and understandable fears from Australian retailers in adopting Amazon as a business partner. It means relinquishing quality control of the ordering and delivery system, not to mention placing the business side-by-side with industry competitors.
Chantelle Baxter of inspirational jewellery company Be. Bangles is wary about selling through Amazon. “We have a premium product and for us it is all about the brand experience,” says Baxter.
“Selling through Amazon could ultimately commoditise our product. We also face the challenge of having to provide enough stock for Amazon to warehouse. Furthermore, we lose control of the customer experience and their reviews.”
Amazon is aware of the concerns that exist from our local businesses. On the 13th of November, Sydney hosted Amazon as it spoke to a conference of over 500 retailers, exploring how positive partnerships could work.
“We have the long-term ambition to be successful and to earn the trust of Australian companies and the Australian customer,” Amazon’s Australian country manager, Rocco Braeuniger, told a crowd of small business owners hoping to sell their products on the website.
Amazon isn’t here to divide and conquer. On the contrary, it is here to help. So, will we let it in?
First up, Amazon Australia will be focusing on our fashion industry. With the success of The Iconic — officially launched in 2011 — it will be hugely interesting to watch how our local businesses respond. With fashion being Australia’s third most popular category for online shopping (behind media products and homewares/appliances), it’s fair to say that if Amazon is going to work for any industry — it should work for fashion.
Amazon has changed how we shop, and not just for fashion. As I wrote about last month when discussing the new landscape of voice recognition technology (you can read that here), Amazon’s Alexa is completely transforming the landscape of when we shop, how we shop, and why we shop.
Alexa is breaking down barriers for online shopping. Fact: Amazon Echo owners spend 10 percent more, and shop six percent more frequently, than non-Echo owners. So for Australian business owners, why wouldn’t you want a piece of that pie?
Fast, form-free ordering is the way of the future. Digital natives are becoming so used to voice-led shopping experiences, that online forms and even the barrier of a screen can be an irritation that can influence their user experience. It goes without saying that being aware, and open, to voice recognition technology is your key to survival in the future.
However, it’s expensive to create and you need a ubiquitous platform for it to be relevant.
Herein lies the greatest attraction of Amazon’s imminent arrival onto Aussie shores: it offers a customisable interface for its digital assistant Alexa, which lets you take Amazon’s leading technology and make it your own. Engage an agency to develop a strategy for your voice interface and build an Alexa Skill. The Skill allows customers to order from you, using Amazon products, such as Echo.
This is a game changer. And you can be a part of it.
In the case of Be. Bangles, it could develop voice-based ordering through Alexa (by developing an Alexa Skill), which would mean that customers could order a bangle through Alexa, directly from Be. Bangles. This means Be. can retain the customer experience, reviews and fulfillment, and ensure its product is not commoditised. Most importantly, it could capture orders in moments where people are inspired and provide a frictionless experience.
The future of online experiences is with voice, and streamlined shopping experiences. With Amazon able to offer leading technology on both, I say it’s time to forget the fear of its arrival, and start to get excited about what it could offer your business.
This isn’t a story of David and Goliath, folks: Amazon is not one you’re going to be able to beat. And why would you want to? Joining forces with this giant will only make you stronger.
Marty Drill is the CEO of Australian digital agency Get Started.
