Why Amazon Doesn’t Have to be the Enemy
We simply can’t ignore the powerhouse that is Amazon. In 2016, 43% of all U.S. online retail sales came from the online marketplace. While most physical retail stores are struggling to stay relevant in an Internet-centric environment, Amazon is only growing, even seeing its highest numbers to date this past quarter. But while Amazon’s success is impressive, ecommerce retailers have become somewhat disillusioned with the world’s biggest online marketplace and wonder whether or not Amazon is their friend or foe.
But whether or not ecommerce stores decide to partner with Amazon, there are many lessons to be learned from its success. Keep these thoughts in mind as you decide your online store’s current—and future—relationship with Amazon.
Amazon as disruptor
Since its inception in 1994, Amazon has become the premier platform for consumers who want to find a range of items, from the common to the obscure, at a competitive price. The company has had such a major impact that the term “Amazon effect” is used to describe the effect digital commerce has had on traditional retail.
Perhaps Amazon’s most impressive feat is selling relevant products in a demanding but fickle retail environment. While the company started out selling books, a smart choice given brick-and-mortar bookstores’ inability to stock hundreds and even thousands of books in-store, Amazon’s repertoire of goods soon included other products like CDs, clothes and computers. More than two decades later, there Amazon customers can buy nearly anything on the platform.
When the company bought Whole Foods last year, the $13.4 billion purchase signified Amazon’s evolving strategy to dominate one of e-commerce’s weakest, but most promising, categories: edible consumables. As Amazon sees some of its best numbers yet, the company will continue to focus on becoming the premier marketplace for its consumers, whether they’re buying groceries or technology.
Amazon as a tool
While Amazon’s savvy navigation of the ecommerce environment might seem like a borderline monopoly, the platform’s broad and diverse categories can lead to big opportunities for online stores. In fact, working with Amazon instead of against it can give businesses a boost.
But like any ecommerce platform, there are techniques and certain processes retailers should consider to get the most traction. Because a high percentage of purchases on Amazon start with a search, writing well-optimized content is a must. This content includes keywords as well as thorough but succinct content on the product page. A gallery of pictures as well as reviews can allow consumers to feel like they’ve made an educated decision, as well as add a layer of legitimacy.
Amazon is expected to become a useful tool for brick-and-mortar stores as well as online retailers, especially with the ecommerce giant rolling out tech kiosks, grocery delivery services, and retail stores. There’s a good chance that the growth will mean big gains not only for Amazon’s in-house brands but also for other companies that use the marketplace to sell their goods.
Amazon as a template
Though selling through Amazon has its benefits, for some retailers, selling products or services via a business website or other platform is a better option. Still, online stores can learn a lot from Amazon.
Perhaps the most obvious and easily applicable way ecommerce stores can utilize Amazon is price checking. Before listing your SKUs, study your competitors’ pricing and reviews. Is your proposed price too high? Too low? And is the marketplace responding well to that product?
Another aspect of Amazon’s strategy retailers can study or better yet, emulate, is Amazon’s outstanding commitment to customer service. This includes everything from one-click checkouts to two-day shipping. While most ecommerce sites don’t have the employee bandwidth or enough fulfillment centers to completely be on bar with Amazon, efficiency should be top of mind for all ecommerce retailers, no matter their products, service, or ecommerce platform.
To Sell or Not to Sell with Amazon
Viewing Amazon’s business practices from an objective point of view can allow ecommerce retailers to evaluate and correct their own strategies. While there is no right or wrong decision when it comes to partnering with the online marketplace, considering the pros and cons is essential to thriving in an online retail environment that is what it is because of the retail giant.
