In November 2017, the retail giant Amazon decided to open a 24,000 square foot fulfilment centre in Dandenong South, Melbourne and launch its delivery service.
The company said that this development will create “hundreds of new jobs,” contain “hundreds of thousands of products,” and promised “fast delivery”. And while for consumers this news has probably been met with much anticipation, for ecommerce retailers’ feelings of unease are a lot more likely.
So what does Amazon’s arrival down under actually mean for the future of small ecommerce businesses, and what action can owners take to ensure they stay competitive five months on?
What we know about Amazon’s launch in Australia
In Amazon’s official announcement back in August 2017, it stated that it wanted to create an opportunity “for thousands of Australian businesses to sell at home and abroad”, which on the face of it certainly sounds promising. In addition to this, it also claimed this launch would offer Australian customers “low prices on a great selection of products”. And when The Australian delivery service launched in November 2017, all seemed smooth sailing.
However, a recent survey of 1,001 adults in the country found that 90% plan to use the service when it launches — and this is where things get a bit murkier for etailers…
Thanks to its fulfilment service FBA (where online retailers directly ship their products to customers via Amazon’s warehouses) and fast delivery options like Amazon Prime, Amazon products now reach customers quicker than ever.
As a result, Amazon sellers have the benefits of increased flexibility and freedom when it comes to growing their sales – but how can independent etailers compete with this vast marketing channel, especially with many Amazon shoppers, particularly in the remote Outback, have already complained about delivery times being slower than predicted?
How to keep your business competitive
As an Australian etailer, you have two choices. You can either choose to diversify and sell your products via Amazon as well, or you can choose to stay entirely independent.
The option you choose for your business should be based on several factors – how much you want to expand and how specialist/niche your products are (i.e. how much competition is already out there). If the latter option is the more viable way forward for you, then here are a few key strategies to help you stay competitive:
1. Focus on customer experience
To build customer loyalty and earn repeat sales, your business needs to focus on giving your customers an excellent experience. By offering your customers something they might struggle to find on huge websites like Amazon, you are ensuring that they leave with a positive impression.
We’re talking super friendly service, handwritten notes in beautiful packaging, and a seamless journey from purchase to delivery – it’s all about going above and beyond to ensure that you stand out from the marketplace competition.
2. Use customer data to your advantage
Amazon is extremely tight lipped about its customer data. And of course, this makes it harder for marketplace sellers to understand who their customers are and market to them directly.
However, as an ecommerce competitor you can use this to your advantage by ensuring you capture customer details at every stage of their purchase journey. This means using signup forms for newsletters on your website, and analyzing the purchases that your customers make so that you can send them tailored eshots and product recommendations.
We’re sure your customers would love to receive offers for products they regularly buy straight to their inbox!
3. Think the same as Amazon
If you can’t beat them, then join them – or so the saying goes. And if you aren’t prepared to sell on Amazon, then you certainly need to think like they do to ensure your business stays competitive.
Monitor their offers carefully and keep up to date with their latest product and service updates. Remember their huge Black Friday deals in the run up to Christmas? You should be doing the same to ensure your customers have no need to buy elsewhere.
Logistically, you should also be taking advantage of lean fulfilment opportunities, and consider whether third-party fulfilment, or even dropshipping, would be a way for you to improve your ecommerce margins.
4. Use content marketing
Did you know that Amazon isn’t really making the most of the content marketing explosion? Take a look at their website and you might stumble across the odd product video, but blog posts? These are almost impossible to find.
The key to ecommerce content marketing is that it offers your customers something extra – a great tip, advice on alternative uses for a product, or a downloadable user guide.
What’s important to remember that marketing isn’t all about the hard sell – it’s about engaging with your customers and building a relationship with them, which is what blog posts, how-to guides and videos do very well.
5. Connect with your customers
A big downfall for brands selling on Amazon is that they aren’t able to have the same level of customer interaction that they could have on their own websites. Amazon product listings are usually quite bland and unengaging, due to the constraints of their templates.
But with your own website, you have the freedom to present your brand in whatever way you like! Another benefit of selling your products via your own website is the option to link to your social media feeds.
This is a great way to showcase your personality to customers and allow them to have a deeper insight into your brand – something that they would probably find quite hard to do on an Amazon marketplace listing. More tips on ecommerce social media marketing here.
Are you’re an Australian online business owner? How do you feel about the news that Amazon is heading down under? We’d love to know what you think about competing with the U.S. retail giant coming to Aussie shores!