There is absolutely no point in trying to beat Jeff Bezos at his own game. But a certain type of retailer can still thrive in an Amazon world.
Just ask BigCommerce. Once considered among the hottest Australian-founded start-ups, it has had to reorient its own strategy to cope with the growing dominance of the Seattle based behemoth, which formally confirmed plans to enter Australia with its full online retail offering this week.
BigCommerce has moved out of the spotlight somewhat over the past 18 months, during which sentiment among investors towards e-commerce businesses not named Amazon has cooled.
In mid 2015, the Sydney born, Austin-based firm’s Australian founders Mitchell Harper and Eddie Machaalani stepped aside for US executive Brent Bellm. Talk of an imminent IPO has subsided after a $30 million funding round last year.
Amazon is worth a lot of money
The firm provides the tools for small to medium sized merchants to sell products through their websites online. Those merchants – like water bottle maker Camelbak – have been dealing with a seismic shift: a migration by consumers away from purchasing directly on company owned websites (which BigCommerce helps provide) to buying on third party platforms such as Amazon’s MarketPlace.
“We embrace it. We know that there are eyeballs and audiences out there on places like Amazon,” Brian Dhatt, BigCommerce’s chief technology officer, who was in Sydney this week, told AFR Weekend.
“There are customers there that have no idea that you exist and it’s a great opportunity to introduce your brand. We like people working with Amazon. It’s net additive to revenue for our merchants, and it brings more eyeballs to them.”
The challenge for merchants is to convert first time Amazon sales into an ongoing, direct relationship. That requires them to ensure their end to end offering – from their mobile site design and experience to physical delivery – is on a par with that offered by the behemoth.
“You have to recognise the bar Amazon sets in terms of service and fulfilment. If you are not shipping orders out with the same pace that they do, they [customers] will notice that,” he says.
Of course, Amazon is a serious threat to a certain type of retailer. Specifically, multi-brand retailers like department stores, and “big box” outlets of which Australia has many.
“The Macy’s of the world, they have trouble,” says Dhatt. “They are in the most dangerous position, they have other people’s products, and they can only compete on price. They could compete on service, but Amazon has set such a high bar there.”
But for others – those owning and operating their own brands – the arrival of Amazon could represent an enormous opportunity.
Despite Amazon’s dominance of online retail in the US (and growing strength in all retail), a number of valuable e-commerce businesses selling distinctive products to consumers have still emerged in recent years.
The aforementioned Warby Parker, which sells prescription glasses and sunglasses online, is a so-called “unicorn”, valued by venture capitalists at more than $US1 billion ($1.3 billion).
Dollar Shave Club, which sells razor blade subscriptions, was bought by consumer products giant Unilever for $1 billion. And just this week, Chewy, an online pet supplies company, was sold to US physical retailer PetSmart for $US3.3 billion, in the biggest e-commerce deal ever.
“The introduction of Amazon will certainly provide an opening for people who are going to dream big ” says Dhatt. “Before Amazon reset the US market, I don’t think there were a lot of folks coming along like the Warby Parkers, the Dollar Shaves.
The common themes for the successes seem to be unique, distinctive products and a strong overall experience (online, and in deliveries) for consumers.
“It’s an arms race out there for retailers,” he says.
“We have so many choices now, I’ll do the one that’s easy, enjoyable and that I trust.”From the above article, you should have understood that Amazon can’t be learning through a Simple Course. It’s a journey, which requires ongoing learning. To learn more the Amazon business for FREE, look at the Amz Trainer website.
Courtesy – afr.com Blog