With Amazon open in Australia in time for the peak Christmas trading period, many in the retail sector are rightfully worried that Amazon will be a disruptive force for their businesses. While I do think Amazon will wreck havoc on the big-box retailers, I’d argue that smaller retailers are well positioned to grow and thrive in this new retail environment.
The following are practical ways for Australia’s small retailers to take advantage of Amazon’s presence:
Go beyond commodities
Stock up on merchandise that customers won’t find anywhere else. While Amazon is great for purchasing commodity products such as books and mass electronics, it’s not the best destination for unique, independently produced or sourced “cherish” items.
If you’re a retail shop who has a highly curated product offering and a great in-store and online experience, you’ll be well positioned to remain competitive.
Partner with Amazon as a sales fulfillment channel
E-commerce is not as pervasive in Australia as it is in the US and Europe, as a lack of e-shopping adoption by retailers and costly shipping options have hampered growth of this channel to date.
Added to this is that smaller merchants sometimes struggle with the operations and logistics of fulfilling and shipping online orders.
If Amazon continues its rollout as it has in other markets, Amazon will eventually offer retailers the ability to manage stock and ship the products in Amazon’s warehouses.
This would give an independent merchant the opportunity to leverage Amazon’s multi-billion-dollar infrastructure and take advantage of its negotiated shipping prices. In other words, a small business can now have access to the resources of billion-dollar retail company for a fraction of the cost.
Personalise customer interactions
Selling online may enable you to provide personalised recommendations, but nothing beats the personal touch that in-store associates can provide.
It’s more important than ever to invest in your workforce. Hire the right people and see to it that they provide top quality customer service. Train them to remember loyal patrons and to tailor their approach to each shopper.
You can also introduce in-store services such as product curation and personal styling services.
Don’t fight on price
Although some well-known large Australian retailers have repeatedly stated in the media that they will compete with Amazon on price, I think this is a huge mistake.
Just look at the long list of large-format retailers and department stores in other countries that are closing stores. Amazon seems less focused on short-term margins but other stores don’t have that luxury and can’t compete on price to the same level as Amazon.
That said, Amazon opening in Australia will promote more price comparison and transparency than ever before. Customer expectations are being elevated. As a result, smaller retailers should continue to work closely with their vendors to see where they could lower their costs of goods.
Would you be able to purchase materials for less if you meet a certain quantity threshold? Perhaps there are middlemen or administrative costs that you can eliminate from the process.
Bring in-store and online together
Finally, recognise that you also need to have an e-commerce presence. If Amazon only does one thing, it will increase the accessibility of online shopping.
It’s focus on convenience, ease of use, and speed, changes the dynamics of online shopping. Customers now expect to be able to buy online and offline, and have a seamless flow between channels.
The good news is creating an online store is easier than ever. Many cloud-based solutions provide templates, drag-and-drop interfaces, and other tools to make it incredibly simple to set up an e-commerce site.
When setting up your online store, it’s important to integrate it with your brick-and-mortar locations. Select a solution that syncs inventory and customer data across multiple channels so you can view, update, and manage your online and offline stores without having to deal with double entries or discrepancies.
Keeping your store data in sync also paves the way for omnichannel services such as click-and-collect, which not only adds convenience to the shopping experience but also drives traffic to your physical stores.
Some retailers like Warby Parker have succeeded at having a true omni-platform experience-for example you can browse their website for glasses and when you come into the store the sales associate already knows what frames you looked at and which frames you want to try on.
Having these types of seamless interactions will only become the norm in the coming years.
Dave Scheine is the APAC country manager at Vend. It is Australia’s leading retail POS software, inventory management, ecommerce & customer loyalty for iPad, Mac and PC.
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