Australian businesses have, up until recently, been largely insulated from the shockwaves Amazon has exerted on the retail landscape. That all changed when the online giant entered the local market in late 2017. Here, Oxygen’s Matt Hampshire tells Inside SAP about some of the unexpected ways Amazon could affect your business, and three ways you can get on the front foot.
Although much of the discussion about Amazon’s entrance into the Australian market has focused on the retail industry, there is another area Australian manufacturers and distributors should be keeping a watching brief on: Amazon Business. Launched in the US in 2015, by the following year, Amazon Business was already worth US$1 billion, with 800,000 participating companies.
Amazon Business essentially offers products and services for businesses, with a promise to deliver within 48 hours. Under a subscription model, similar to the consumer-focused Amazon Prime program, participating businesses can purchase everything from nuts and bolts, medical equipment, hot water heaters and aluminium window frame, to cleaning chemicals, livestock feed, hospitality equipment and office supplies. Businesses can also apply internal purchasing policies within the program.
Matt Hampshire, sales director, Oxygen Digital, says while participating in Amazon marketplaces can be attractive on face value, providing a new sales channel and a new way to introduce customers to your products and services, companies should also consider the significant threat to their business that Amazon represents.
“Amazon is a Venus fly trap,” Hampshire says. “Yes, they will bring you some new customers, but there’s nothing to stop your existing customers being poached too – especially if they are easier to do business with than you are.”
“Amazon kills brands. If Amazon decides there is money to be made in the product category you make or sell, then they will make and sell it themselves. They are already doing so in categories as diverse as batteries, active sportswear and furniture.”
How to compete in an Amazon world
All is not lost, however – Australian businesses can maintain a strong defence against Amazon by leveraging data, content, product knowledge, your people and your partners, according to Hampshire.
“These elements combine to create a great customer experience,” he says.
Be responsive, and get data on your side
A recent survey of consumers by SAP Hybris shows that 91 per cent of Australian consumers expect a response to their query in 24 hours, and more than half of consumers expect that response to demonstrate a clear understanding of their history. Thirty-four per cent of consumers say they get annoyed with lengthy customer support calls if their personal data and history has been lost or forgotten.
“Amazon is incredibly committed to using data to learn as much as they can about their customers, and data should play a key part in your defence strategy,” Hampshire says. “Data will help you understand what your customer wants, and it will help you build better, contextual customer experiences. It will help make you easy to do business with.”
Create a consistent consumer-like multi-channel brand experience
Recent research by IBM showed that 80 per cent of B2B customers now expect a B2C buying experience.
“At the same time, your brand messaging and behaviour needs to be consistent across every channel – whether on mobile, web, your call centre or in stores,” Hampshire says. “As in consumer businesses, utilising great content as part of your brand experience will help you strengthen emotional bonds with your customers.”
Leverage your greatest allies – your people and suppliers
What doesn’t Amazon offer in their ‘one-size-fits-all’ marketplace? The depth of experience of the Australian market and know-how about your product.
“This is where your sales teams, your shopfloor staff or your call centre employees can be your secret weapon,” Hampshire says. “Real people delivering relevant and contextualized service will be what sets your business apart.”
He also recommends working with your supply chain partners against this “common enemy”.
“Share your data to drive product innovation, improve logistics, and to offer the long tail of products to customers,” Hampshire says.
By combining these elements to deliver products and services that go beyond what Amazon can deliver, B2B businesses can hold their own – and win – in this new world order.
This article is sponsored by Oxygen, a DXC Company. As the Sales Director at Oxygen Digital, Matt Hampshire helps customers create digital customer-facing solutions that build customer loyalty, drive revenue and reduce costs. If you would like to have a discussion about how Oxygen and SAP Hybris can make you easy to do business with, please contact Matt at email@example.com.