Considering Amazon’s record for disruption, how should Australian retailers react to its imminent arrival down under? While we don’t know exactly when Amazon Australia will launch, we have a good idea it will be in time for Christmas. So, retailers waiting to see what happens have a few options. They can freak out, or they can seize the Amazon opportunity.
Better to Grab the Amazon Opportunity than to Despair?
However retailers react depends on perspective, as consultant and Amazon expert Nick Lavidge said.
“Is it scary? Is it exciting? I guess it comes down to how you look at it,” Nick said at our Amazon Australia breakfast conference in Sydney. “Are you a glass-half-full or a glass-half-empty type person?” Nick. CEO of the Alley Group was our featured speaker on October 12, addressing a standing-room-only audience gathered to learn about Amazon Australia.
“We think, for our clients, it’s an unbelievable opportunity and for fashion, retailers, and brands of any size, it can be amazing, depending on your outlook and how you treat it.” So, what makes Amazon such an amazing opportunity?
It’s An Additional Revenue Stream
If it follows its pattern in other markets, Amazon Australia will give retailers an additional revenue stream. Amazon can help Australian retailers tap not just a national customer base, but an international base as well. Altogether this amounts to at least 240 million customers that make monthly purchases. Retailers should not see Amazon as a brand-crusher, but simply as a popular “shopping search engine (offering a) great customer experience” for an additional revenue source.
It’s a Level Playing Field
Retailers don’t have to be big name brands to tap the Amazon Opportunity. Because Amazon emphasizes “amazing products” it forces retailers “to stock the best” they can offer, Nick said. As with some of Nick’s clients, retailers don’t need brand recognition to compete with Fortune 500 companies. With great products, descriptions and images, wise channel management. and Amazon’s marketing services, a retailer can have a new platform to build its brand.
As an additional channel, the Amazon opportunity is “the best lower funnel tactic” a retailer can employ, Nick says. For instance, Amazon gives a higher conversion rate at a lower marketing cost (cost per click) than other online channels. Thus, with smart marketing and product management, retailers can easily integrate it with their overall omnichannel strategy. Similarly, with the right technology, they can also manage Amazon channels as part of an overall supply chain.
Cin7 recognized the Amazon opportunity and in 2016 became the first inventory management solution to integrate Amazon Seller Central, Amazon Vendor Central, Amazon’s logistics service, FBA, and Amazon Dropship. With Cin7, retailers can automate order processing, routing, and fulfillment while maintaining control of overall stock levels and inventory costs.
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