Amazon's Arrival Is Not All Doom And Gloom

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As the retail world prepares for the Australian arrival of Amazon, small businesses might, particularly, be feeling pressure to get their digital and omnichannel house in order. While large retailers have the resources to build new systems and rearchitect systems, smaller retailers aren't in the same position. Dave Scheine, the new country manager for cloud-based point of sale system Vend says the news isn't nearly as dire as some might think.

Scheine said as businesses have increased their use of cloud systems they have been adding the glue to big together previously disparate, and often paper-based, systems. But he said some were struggling as these new systems are more complex than their old ways of doing things.

One of the challenges this brings is that the tight integration creates a vertically integrated technology stack that could lead to vendor lock in. But, Scheine said there's a little more to it.

"Things are more tightly knit but we're also using things that are a lit more sophisticated. Historically, retailers might have had lots of 'mom and pop' software providers who would only focus on point of sale of some other niche. The system was not really that robust. If it broke, it might not impact inventory or payments but you might have been on an expensive long-term contract. But with cloud solutions, you're more likely ona month to month arrangement".

So, while there's more complexity, and there's a lot more data flowing through lots of different systems, there's an opportunity to work with global providers that are more reliable.

With Amazon coming, many retailers might feel that they need to outplay Amazon at their own game. But that's not the case, said Scheine.

"Retailers will really struggle to do the same things that Amazon does - they dont have access to a billion dollar infrastructure. Small retailers need to focus on a few things," he said

The first one is to up their game and find what products they can offer that will diffentiate them from Amazon. Scheine said that while Amazon has great strength on high volume commodity items, they are weaker when it comes to low volume or niche products.

Scheine said Amazon is going to raise expectations for shoppers.

"It's important to have a strong omni-channel experience," said Scheine. "Consumers are going to expect to be able to ship both online and offline. Any kind of information you have around loyalty or customer information will need to move seamlessly".

Amazon can, rather than be purely a competitor, be an ally. By exploiting Amazon's Marketplace, retailers can take advantage of Amazon as another channel.

"You want your products to be available wherever consumers are browsing," said Scheine.

It's important for retailers to talk with their peers and experts in order to move along this journey and maximise their chance of success. That starts with access to data which means moving away from older, manual systems.

Then, businesses can start to look at the data and draw out insights that help them improve perofmance.

Scheine says the threat of Amazon is being overestimated. While "big block" retailers are likely to see the greatest impact, smaller retailers are under less pressure he said.

Interestingly, Scheine said Australia is moving towards online shopping a little slower than some other parts of the world. That means we might not see as much of a disruption to existing stores.

And, by partnering with Amazon through their marketplace, businesses can leverage Amazon's logistics support and focus on further improving their customer services and experiences.


Comments

    People tend to forget there are other companies at play in the consumer goods market, beyond the retailers. Local competition is good for local distributors, who seem to have been forgotten of late. Instead of Amazon supplying the Australian market from the USA, they're actually local, employing local people, and sourcing goods from local companies that also employ local people. This is great for Australian distributors, who in the past have been losing business as international retails supply into Australia from OS.

    You can bet wages and conditions will be the minimum they can legally get away with, and very few people will be employed full time.

    I believe casual staff are cheaper to employ, and easier to sack.

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