Amazon has officially launched in Australia. It’s a moment retailers in Australia have expected and now that it’s finally here they are out of excuses to be ready. There will be plenty of complainers, saying Amazon’s vast resources and lower costs give it an unfair advantage.
Those who think they can’t compete probably won’t. Aussie retailers have lots of advantages over the American online juggernaut – they just have to take some time to see them and take advantage.
Amazon is a partner as well as competitor
I was on the radio the other day, doing my regular spot on ABC Melbourne. The guest on before me was from a small bookstore and he was lamenting the way Amazon had gutted local book sellers. But, he also noted that smaller, suburban stores with a connection with the local community were doing OK.
The secret was to offer books outside the mainstream of usual bestsellers and to focus on niche titles and to offer a personalised and comfortable in-store experience.
Although Amazon can use its algorithms to sell you more of what you like, a local store has atmosphere and can appeal to all the senses (although I don’t suggest licking the books to taste them!). Make you in-store experience as pleasant as possible and you’ll go a long way to countering online competition.
You don’t just have a store
Your local store has a massive advantage over Amazon – proximity to your customers. While Amazon has to put together a network of warehouses and a fleet of trucks, you already have a distribution centre right in the heart of your customer’s neighbourhood. Start treating your store as a place where customers can come and as a place from which you can dispatch deliveries.
While shipping could add to the cost of what you sell, you’ll have the benefit of faster delivery. Florists have known this for years. You can call a local florist and have flowers delivered to someone the same day. There’s no reason you can’t do the same.
Don’t fight on price
Many people think Amazon’s big play in retail is based on price and range. While those are important factors in many buying decisions, they aren’t everything. Service and convenience are also critical. Customers will pay extra for better service on items they see as valuable.
While there’s no point fighting on price over a $2 widget, offering faster delivery or proof that you’re selling genuine products and not knock-offs can be a massive advantage.
For example, there have been many reports of people purchasing expensive bicycles only to have the carbon fibre frames fracture under stress because they aren’t genuine. People will pay for the assurance that you are selling the Real McCoy. And, in fulfilling the need for quick gratification, many people will pay extra to get items shipped the same day or within hours.
Now is the time to get better
Although Amazon has launched locally, they are still offering a limited range of products and Amazon Prime, their three-hour shipping service, is yet to grace our shores. If local retailers can get their ducks in a row, they still have a chance to shore up their customers.
If you don’t already offer next day or same day shipping – do it. Amazon’s play is price, range and convenience. Even if you can’t beat them on the first two, the third can be a powerful trigger. How many of you have abandoned an online shopping cart when you found that shipping was going to take a week? If you can offer next day or same day shipping you can turn some of those carts, or customers looking at other options, back into paying customers.
Amazon’s entry to the local market has been expected for almost two years. Local retailers have a choice; curl up and die or thrive. Amazon will drive more people towards online shopping – and there’s little doubt local stores won’t see a fall in sales as people feed their curiosity. But by ensuring customers have a great experience in your store and can get great online service you can not just compete but thrive as your online channel rides the wave Amazon is creating.