Ignore Amazon at your peril
Are we fit enough to compete with this game changing retailer?
That is a question nearly all traditional style retailers are asking, and if not, should be asking of themselves and their advisors.
Amazon has just launched its Amazon Prime offer in Australia.
Prime, as it is known wherever it operates, is a vital part to Amazon’s future growth as without Prime it is just another online shopping option, albeit the world’s biggest.
With Prime comes Alexa, the voice activated intelligent device that orders for you, that builds a profile of your needs and forecasts when you will need replenishment of your favorite items. It knows when you will need washing powder, butter or eggs.
Prime is now available in Australia at half what it costs in the USA, as a launch promotion.
Amazon is serious about Australia. It has stated we will “have access to the widest selection of Prime benefits of any country, ever”.
These benefits include free two business day delivery, including free delivery from the USA, to over 90 per cent of Australians. Plus movies, plus thousands of e-books, free games and the list seems endless. All this for $4.99 per month, after a free trial.
In USA, Prime is in more than half the homes and accounts for a much larger percentage of sales than online sales in Australia.
We need to do something. But what can we bricks and mortar stores do in the face of this onslaught?
We need to offer what the digital world cannot do.
Amazon are very good at keeping their promise – on time delivery of what a consumer ordered at a sharp price. What they can’t do is provide a great experience in a real store.
Most people will still want that human contact, that personalised human exchange of thoughts, advice and interaction.
Not customer service, but real customer connection and care.
What does your business do that wows, in terms of genuine customer connection? Do you call and thank them for a major purchase, ask them if they are happy with the product/service? Do you send them a birthday gift? Do you even remember their name when they next return?
All small things that people appreciate, no matter what their age or demographic is.
Is your business in the ‘Going shopping’ – the pleasurable type – or is it in the drudgery category of ‘Doing the shopping’. Amazon appeals more to the latter, and relies on price, consistency and convenience. There is not a lot of ‘experience’ in online shopping.
The challenge, particularly in the ‘Going shopping’ sector, is what can you do that is better than your competition? Find something that will impress your customer, make them remember you, and put a smile on their faces when they do. Without that, you are just one of the options. But if you treat them with special care, they come back for more.
Remember, Australians will not spend more because of Amazon, they will just change the way they spend it. Make it hard for them NOT to shop from you.
Do something. Do it well but do NOT ignore this change in the way the future will be. It is really a case of doing nothing, is not an option.
In all the words written on this subject, there are two statements that stick in my mind.
If you can put your product in a box, Amazon will sell it.
“Your margin is my opportunity”. Jeff Bezos, Amazon CEO and the richest man in the world.
First published on 22 June in InsideRetail.