Blog Post - Hugh Fletcher, Apr 30 2019

What Amazon Can't Do and how to stand out from the giant - Part One

What Amazon Can't Do and how to stand out from the giant - Part One

It can sometimes feel as though we're living in an Amazon-centric world. Not a day goes by without a story of a new innovation set to revolutionise how we buy and receive goods from the ecommerce Goliath. No matter your thoughts on Amazon, it has undoubtedly been responsible for enabling many organisations to take advantage of the online opportunity and the online customer.

You only need to look at the stats to realise how important Amazon is in the West. Our latest 2019 research explores how much influence Amazon has on the ecommerce market and found that, across eight countries surveyed, Amazon commands an average of 36% of consumer online spend. In the US and Germany, that share of the digital market pushes above 50%, while in Spain and France it falls just short.

Amazon's dominance is only going to grow as Prime becomes even more of a mainstay in households. Our research indicates that nearly half of consumers (47%) are now Amazon members, rising to 68% in the US and Spain. And what we've learned about Prime members is that over time, shoppers buy more and more through Amazon and expect more speed and convenience. The only problem is, with Amazon so strong and so omni-present, how does a direct to consumer (D2C) approach work in the Amazon age? How do you encourage a consumer not to default to Amazon for their online purchases?

The answer is twofold: learn from What Amazon Does Do and implement What Amazon Can't Do (WACD).

In the first part of my two-blog series, let's have a look at three areas that brands and retailers can start to do.

1. Stand for something

Increasingly, consumers are looking for brands that stand for something. These are affectionately and more recently referred to as "woke" and are particularly liked by millennials. In fact, the majority of shoppers we spoke to (55%) told us that a company’s ethics and morals played an important role in the purchasing decision.

Now you could argue that Amazon stands for something. But, really, what is stands for is scale and profit. This is an organisation whose logo spells out its aim to sell everything from A-Z and removes products that cannot raise a profit.

In an era of ease, speed, convenience, scale and profits, aligning a brand or a product with a cause is something that Amazon just cannot do, and is probably something it's not that interested in doing either (although you may have noticed that you can now donate to charity via Amazon).

But there are organisations that are great at this, and those are the ones that are authentically built on what they stand for. Lush is a good example; it provides premium products made from ethically-sourced vegetarian ingredients, as well as actively fighting against animal testing and using eco-friendly packaging.

Then let's take Nike, which is a great case study of an established organisation aligning itself with causes, such as its recent campaigns backing Colin Kapernick, as well as Raheem Sterling. Could you argue that this is simply jumping on the bandwagon, and using a difficult situation to promote a brand? Perhaps, but this campaign works for Nike because it also aligns with its mission statement which is "to bring inspiration and innovation to every athlete in the world." The emphasis in this case being on "every athlete".

2. Be specialist and curate

Amazon's aim, right from the beginning has always been about scale, and who can argue with the vast range of goods and now services that it offers? But what is you want something specific or specialist? What if you want to know that the retailer that you're using really knows about the products it's selling.

If you know a committed hobbyist, it's unlikely they fuel their passion with purchases from Amazon. Cyclists, for instance, use Wiggle, footballers use pro:direct, and fashionistas use Net-a-Porter. In these cases, the brands and retailers often stand for more than the products they are selling.

To a degree, they are owning the experience and the outcome of the product. Wiggle owns cycling and the health benefits and lifestyle that this brings. Pro:direct makes every player feel better about their footballing abilities via their equipment, and Net-a-Porter makes you more fashionable. It's more than just a transaction.

The specialism of the online retailer acts as assurance to the customer. And the expertise that this brings can also help guide customers to the right purchases. In a world of Amazon generalisation, being specialist counts. And in a world of the endless shopping aisle, curation helps.

3. Create a community

Related to the point about specialism is the concept of community. What you purchase often reflects who you are as a person, your hobbies, your views, and your aspirations. These purchases can often gain you access into collective groups - in fact, the history of the fashion industry is littered with examples - mods, punks, emos. And what about a brand like Harley Davidson - which represents a way of life, a culture, and a shared lifestyle?

By purchasing from Amazon, what "group" do you belong to? The answer is the huge and diverse range of people that buy from Amazon.

Let's take retailer Sephora for example, which has taken this concept of community to its advantage with its Beauty Talk and Beauty Board. This forum is used by beauty enthusiasts to share ideas and communicate with other like-minded beauty product lovers. The Beauty Board allows users to upload pictures of them wearing the products, and links through to the product pages.

And of course, there's Nike - a great example of a brand that has been forced to embrace the benefits of Amazon, but which has sought to protect its brand equity and its direct to consumer relationships. It's done this through the Nike+ programme featuring apps and wearable tech that allows fans to track their fitness progress and compete with other members through its Nike ID programme.

Purchasing can often be more than just transactional - it can be the gateway into a social group. But that's far from it.

In my next blog, I'll look at how brands and retailers can take advantage of the "waiting phase", why Amazon falls down on the little personal touches on the packaging, and how to take advantage of CRM and loyalty benefits. Stay tuned!

Read part two