How to differentiate your business before Amazon launches

Shannon Ingrey

22nd Aug 2017

Today, if you want to make a purchase, big or small, you can walk into a retail store, browse the shop and maybe speak with the shop’s owner. She might even have helpful recommendations or provide additional details about the item or items you’re looking for.

This kind of retail experience may soon become harder to find in Australia, as Amazon prepares to open a fulfillment center in Melbourne. American retailers know what that means: Last year, Amazon captured 53 per cent of all online US sales growth, with 43 per cent of all online sales in the US transacted through Amazon, according to Slice Intelligence.

Now’s the time for Australian retailers to consider how they will differentiate their businesses from the retail behemoth that has become a formidable competitor for many American mid-market and enterprise retail brands. Here’s a quick guide for preparing your Australian retail business for long-term competitive success.

Step into your customers’ shoes.

This is the mantra of the customer-centric omnichannel approach. It’s also one of the best ways to compete with Amazon, which isn’t known for its customer service.

Start by identifying every channel where customers interact with your brand. Be sure to include every instance where they might browse, shop and put your brand’s products in their carts, either virtually or in person. Ultimately, you want to create a customer experience that brings shoppers back to your store.

Bring the best of your in-store experience online.

Look for ways to personalise shoppers’ interactions on your website and in your stores. Make it easy for them to use any device to purchase from you – and be sure you connect the dots on their experience, so you can track when and from where they’ve browsed or carted items then abandoned your site.

For example, a shopper who consistently views swimwear on a website will likely be interested in hearing about a swimwear sale online or in-store. If that shopper buys swimwear in-store, she likely would appreciate related product recommendations about items like sandals and beach towels via email.

Research shows this is a good strategy. A global consumer study from Oracle, Retail Without Limits (gated), shows 56 per cent of consumers recognise that sharing personal information can benefit their shopping experience. A growing number of consumers want brands to use that data to provide a personalised experience.

Connect with customers offline.

Even if you have no bricks-and-mortar presence, you can engage customers offline with pop-up shops to begin having a more personal conversation about each shopper’s needs, drive traffic to the online store and boost revenue.

Digital-only brands such as Bonobos and Warby Parker have found tremendous success going offline with zero-inventory pop-up stores. David Bell, professor of marketing at the University of Pennsylvania’s Wharton School of Business, found that 17 per cent of Bonobos customers are “born offline,” meaning their first interaction with the brand is a zero-inventory store. Although those customers only account for 17 per cent of the acquisitions, they account for about 21 per cent of the volume of sales.

These pop-up stores have led to the zip-code phenomenon, where there’s increased online activity in surrounding areas when pop-up stores open and decreased online activity when they close.

Offer unique, authentic experiences.

Amazon claims an average of 15 per cent of a retailer’s profit from a sale, in addition to direct monthly fees, both of which cut into retailers’ margins. Amazon also gathers data on products sold on its site and can source the same items from distributors and sell them on Amazon.com for a lower price than the retailer offers.

Offer deals to your customers and subscribers that draw them back to your brand. Consider reward or loyalty programs that provide incentives. Make your interactions with shoppers conversational, and be sure to attract them back to your bricks-and-mortar locations, because in-store shopping is a valued touchpoint for many Australian consumers.

According to AMP Capital’s 2017 Recommended Retail Practice Report, Generation Z shoppers (18-22 years of age) in Australia and New Zealand still prefer to shop in-store just as much, if not more than their older counterparts. They prefer in-store shopping because they are drawn to the social contact that in-store shopping provides. Amazon understands the value of this in-person interaction and has recently opened bricks-and-mortar stores in the United States that showcase its best-selling books.

There’s no silver bullet to protect your brand from the Amazon invasion. But you know your business best, and you can start planning today. Your brand’s success is a marathon, but it might feel a lot more like a sprint once Amazon touches down in Australia. Consider these and other tips today to prepare for a more competitive retail landscape tomorrow.

Shannon Ingrey brings more than a decade of experience in e-commerce marketing and management to his role as general manager of Oracle + Bronto APAC. Specialising in international business development and operations, he has been a driving force in growing leading brands in Asia Pacific and European territories. He most recently served as GM of business operations for Élan Media Partners in Sydney, while also managing the firm’s offices in Hong Kong and China. He now leads the Australian office of Bronto Software, a cloud-based commerce marketing automation platform.