In-Scope: The Elephant in the Room

Hannah Carlos-Bertollo is an Account Executive in OMD Fuse Melbourne, helping clients deliver on their business challenges with content led decisions.

Did you know that Amazon’s workforce is now larger than the population of dozens of small countries?

The e-commerce retailer revealed that it employed 541,900 people at the end of the third quarter. That’s bigger than the populations of some 63 countries and territories around the world including the likes of Iceland, the Bahamas and Monaco.

With statistics like this, it’s easy to see why Amazon has been hyped as the catalyst to change Australian shopping behaviours as we know them.

So, now that Amazon has launched, just how scared should Australian retailers be, and is it really going to be as scary as we think?

To answer this, it is my opinion based on how other global markets have responded to Amazon, that Australian brands need to become more customer obsessed rather than trying to predict every move that this monumental company is going to make. Retailers now more than ever, need to look at how Amazon invest in their end customer, not just tactics on how to combat revenue loss.

Amazon is here. So, we need to start tackling the elephant in the room.

Data:

In the past, Australian retailers have been guilty of flooding their customer databases with frequent and unwanted offers.

Amazon avoids this ‘consumer annoyance’ with algorithms that target audiences with relevant ‘next based offers’, based on the previous product history or what ‘look alike’ segments have purchased. It’s smart and it works! They’re offering the customer what they are most likely to want. Add in the social media component and you have a powerful digital monster.

Keeping in mind that Amazon is the ‘The Everything Store’ the fight for the share screen will become more brutal than ever. With screen becoming smaller (mobile marketing first) and almost 80% of shoppers never going to page 2 on Google, brands will need to be in the prime real-estate if they want to be at the top of mind.

Australian retailers need to start unlocking their customer data to understand how they can grow or at best, maintain their share of screen. Using data to guide entertaining, personal, useful content and timely, non-promotional communications can work to connect and engage at an emotional level that will surprise and delight customers, making them more loyal and valuable – Amazon, or no Amazon. The price message can then be carefully woven in now that the data informs us is just right.

Brand:

Amazon live and breathe their values of customer and price. They always have their customer at the top of mind with their superior service and they have every product at affordable prices.

To attempt to combat these strengths Australian brands need to start thinking more about what they stand for, what their core values are and how they want to differentiate themselves in market.

With a firm value proposition, a clear point of difference and using the aforementioned data to tell them exactly what their customer wants, retailers can begin to communicate exactly why Australians should shop with them through every marketing message.

The likes of kikki.K and Mecca Cosmetics have built multi-layered value-based brands, complete with tribes of engaged, loyal customers who are not price-driven but around whom the product range has evolved. This is how Australian retail brands will take on the beast.

Brands who fail to invest in what they stand for will find themselves undifferentiated and undercut in price – a very tough spot to be.

Think Local:

Australian retailers have a head start as many of them have physical stores which have been successful in building strong relationships within local communities. Many know their customers, what they come in for and their first name’s.

With the massive evolution of retail that awaits, Australian retail brands will need to focus on these relationships even more, in the most genuine way possible, as Amazon just cannot compete with relationships.

Experts predict that Amazon Australia is likely to see a slower burn, because unlike other countries Australian’s have a limited knowledge of Amazon (unless they are Australian retailers of course). Therefore, brands need to tap into the human element on what drives that customer into their store while they have the advantage.

Reward programs, local area marketing (new store openings, special events, newly fitted out stores) and ‘click and collect’ messaging need to work across multiple channels and truly provide customers with ‘money can’t buy’ experiences that they won’t get elsewhere.

So, is your brand ready for the battle?

With Coles and The Iconic having the ability to deliver their goods to their customers in most cases on the same day, brands are already stepping up the challenge.

However, it’s going to take constant innovation, exceptional customer service and keeping up with digital marketing and what it has to offer to keep them ahead of the game.

The arrival of Amazon has the potential to be a fair fight.

 

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