What can UK retailers learn from the Amazon model?

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Author: Enda Breslin, Head of Sales and Business Development Europe, Radial

Amazon is today’s eCommerce mecca. For its customers, it offers a one-stop shop for everything they could possibly need, from books, to clothes, to household items, and, most recently, online grocery shopping through its new fresh food delivery service Amazon Fresh.

Indeed, its reach is so pervasive that an estimated 55% of shoppers start their product search on Amazon, meaning it is overtaking Google to become the search engine of shopping.

 

And it is just as attractive for retailers as it is for customers, allowing brands to offer their products to the biggest audience in eCommerce, and offering attractive and easy fulfilment options.

 

Monopoly or market share?

 

The sheer breadth and efficiency of Amazon’s fulfilment solutions have played no small part in its rise to eCommerce dominance. It can offer a much greater element of choice to consumers who now crave convenience.

 

To broaden its reach, Amazon has invested in creating new services, such as Amazon Prime, prioritising partnership with third party resellers and quietly investing in freight aircraft to bypass logistics giants and gain more control over the end delivery process. The company has created its own eCommerce eco-system, with limited need to rely on outside partners. This in turn allows them to keep close control of stock and delivery and eliminating room for error.

 

Of course, options such as introducing personal freight aircraft isn’t an option for the majority of retailers, and much of what sets Amazon apart is prohibitively expensive. But that’s not to say that businesses can’t learn from this spirit of innovation. Here are four key takeaways from the Amazon approach to eCommerce.

 

Focus on the consumer experience

 

Part of the Amazon advantage is its focus on customer satisfaction, driven by constant innovation, personalisation, and fast and reliable fulfilment. This means they regularly trump their rivals in customer experience surveys.

 

But customer satisfaction is something all retailers can – and should – build on. Any merchant, no matter how big or small, can recreate a positive customer experience and create big brand loyalty.

 

And for all its strengths, Amazon’s customer service experience has the potential to feel impersonal, simply down to its sheer size. This is where smaller retailers can come into their own, building customer relationships through personalised, one-to-one interactions, whether online or in-store.

 

Similarly, brands looking to compete can build on brand loyalty through relevant content marketing. Establishing yourself as a trusted resource by updating a blog with educational articles, leveraging social media to build customer connections, and injecting brand personality into the shopping experience are low cost, yet highly effective ways to build on the customer experience.

 

Customer Service very important

 

Find your niche

 

Part of Amazon’s appeal is its huge range of products across all verticals. While it’s a fantastic one-stop shop for all your needs, it also means it doesn’t have the specialty knowledge that comes with having a specific focus.

 

Creating specialty, niche or customisable products can allow you to be competitive on your own terms. This focus will help you stand apart from Amazon, rather than competing head-to-head. Capitalising on your specialty knowledge will also build consumer trust and loyalty, while selling customisable products means stepping away from the mass-produced to innovative products and experiences that can’t be found on Amazon.

 

Fulfilment: get the basics right

 

Amazon is known for its breadth of fulfilment options, but trying to compete by offering a similar range is simply out of the question for most other retailers.

 

But that doesn’t mean you need ultra-fast shopping to keep customers loyal. Focus on the essentials by offering a combination of low cost and next day delivery, as well as alternative options such as click & collect and convenience store delivery.

 

Whatever your fulfilment policies may be, the key to success is setting realistic expectations and being communicative about their deliveries. Providing they know when their packages are arriving, the majority of customers are willing to wait for delivery – particularly if it is at a reduced cost.

 

Indeed, the key takeaway for retailers is to find that sweet spot between efficiency and cost. Despite Amazon’s reach, there’s still space to attract, convert and continually delight UK shoppers.

 

Amazon: friend or foe?

 

Amazon divides many of today’s online retailers. Is the platform a direct competitor that must be defeated at all costs, or does it provide an easy opportunity to expand a business and gain access to millions of shoppers?

 

Of course, the answer depends on your goals and strategy for growth. Retailers must think strategically about if, when, and how they engage with Amazon. Many brands can benefit from using it to expand into new geographical areas, or by selling surplus inventory. And as the first point of call for the majority of online shoppers, it gives retailers the opportunity to reach a huge audience who are already willing to spend.

 

But for businesses who pride themselves on brand equity, product integrity and exclusivity, Amazon may not be the best option. Partnering with such a behemoth may dilute their value, and means they risk being perceived as a commodity brand to consumers.

 

As with any business relationship, it’s important to assess the extent to which working with Amazon will further your ambitions as a business, and avoid sacrificing brand integrity to shoe-horn your business into the Amazon model. Regardless of whether such a partnership would be a help or a hindrance, it’s clear that there is a huge amount to be learned from Amazon’s road to success. Fulfilment, customer service, user experience – all these factors are part of why Amazon has become such a dominant force in retail, and elements of its approach can be incorporated into businesses of any size.

 

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