After much speculation and Y2K-like concern, finally the day arrived, and Amazon in its physical entity entered the marketplace. Everyone who identifies as a retailer is feeling some degree of anxiety about their current business model and what this means for their future as a retailer. Now the battle isn’t confined to be between online and physical stores alone. The global giant that is Amazon is doing a great job of shaking up the industry as a whole and even resulting in business owners predicting their own demise. However, it doesn’t have to be that way and in this article, I will show you why.

So, what is Amazon Marketplace? Amazon has been around for a while and it is now the largest ecommerce company in the world. At first the company sold books, but recently is a titan of e-commerce, logistics, payments, hardware, data storage, and media. Amazon is a large threat in the B2B World. The great thing about Amazon is that businesses can use Amazon’s technology to list their own items for sale. The benefits of this are enormous and include more exposure for your business, it has a payment processing facility, fraud protection and it even takes away the need for your own website and shopping trolley (although many retailers do have both.) In 2013, more than one billion units worldwide were ordered from Marketplace sellers on Amazon across over two million small businesses, world-class retail brands and individual sellers. Can you imagine how many there are today!? Â Amazon has just opened a physical warehouse in Melbourne, which has caused ripples throughout the retail industry, especially whitegoods retailers like JB HiFi and Harvey Norman, due to significant discounts on these items.

So what can those retailers do to raise a decent defence against Amazon? Competing on prices isn’t necessarily the only response. Often it will be more difficult to beat Amazon Marketplace on price, so I suggest retailers look to other areas to rival Amazon, and the one that comes to mind quickest for me is customer experience. This is something Amazon generally excels at but through the sheer volume of its customer base, doesn’t always necessarily get right, so those retailers looking for a point of difference are best to find one here and emulate what makes Amazon so customer obsessed while not letting any opportunity for a positive customer interaction slip through the cracks. I would start by offering an individualised experience to past customers in an effort to create loyalty. So why not send an individualised email to former clients, and to thank them for their support in the past, offer them a gift voucher with their next purchase. I would recommend against going into a discounting battle — Amazon would always win. If you offer your customers a discount of $20, it seems very little, whereas a gift voucher for that amount (eg a $20 voucher for a beautician or clothing/department store) is always very well received.

Create a client database if you don’t already have one, and offer them a regular email where you provide useful articles, special offers (but not discounts!) and a review of your most recent items. Can you create an App that will be fun for clients and provide top of mind awareness? The App should ideally be about more than just your business. So, for example, an App that is a calendar reminding you of your favourite TV programming might be something interesting for a store like Harvey Norman. Or an augmented reality App that utilises virtual technology to showcase how your room would look with the inclusion of a new couch or another item of furniture.

It will be important to create that something extra to offer to your clients. Amazon has such a diverse range of items to focus too much on customer service or the safety and interest measures of each individual product. This is where the point of difference lies and where you can capitalise. Provide value about the sale of your items to your clients — their safety but also the culture that goes with them. For example, what extra value lies within a television or game console? For the latter, your customers may appreciate information about the latest release of new games (that you stock) and special evenings to dress up and purchase them.

Another area that businesses can see as their point of difference is an ability to solve problems quickly and effectively. Although it might seem counter intuitive, customer loyalty is more strongly created when your customer has a problem and you solve it, rather than having a consistently frictionless experience. People remember a pain point and they appreciate that you helped them get through it. It builds strong brand advocacy which cannot be bought.

With each cloud, there is a silver lining, and vice versa. Find the opportunities that are presented by the arrival of Amazon Marketplace in Melbourne. How can you provide a better experience to your customers?




Katja Forbes is a UX design expert. She is International Director on the Interaction Design Association Board. Speaker, media commentator, DesignIt Aus/NZ MD.

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Katja Forbes

Katja Forbes

Katja Forbes is a UX design expert. She is International Director on the Interaction Design Association Board. Speaker, media commentator, DesignIt Aus/NZ MD.

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