Don’t Fight Amazon, Embrace It
It’s impossible to discuss retail or e-commerce these days without mentioning Amazon.com. Much has been written about Amazon being the demise of small retailers and startups, and many articles offer ideas on how to compete or work around the 800-pound gorilla. But sometimes the old adage “if you’ can’t beat them, join them” holds true. Retailers and e-commerce brands that set out to build a strategy that embraces Amazon, rather than dismiss it, can find a strong partner and collaborator that can help, not hurt, their business.
There’s no denying Amazon’s strength and reach. It remains a top destination for online shopping, gobbling up 49 percent of the U.S. e-commerce market (5 percent of all retail). As of June 2018, there were more than 100 million American Prime members. During this past holiday season, more than 180 million items were ordered on Amazon between Thanksgiving and Cyber Monday.
With scale like this, retailers need to do more than just keep an eye on what Amazon is doing. They should proactively determine how they can work with Amazon and model their own online strategy after the company. Amazon should be embraced as a partner in the early-stage development of a consumer company. An Amazon strategy is a critical part of an omnichannel experience, and companies that are open to this can tap into the opportunities that Amazon brings as it relates to distribution, feedback and customer acquisition.
One of the key benefits of selling on Amazon's marketplace is that it can help enhance distribution through a built-in logistics channel. From a user perspective, it provides a forum for feedback, customer reviews and communications. Amazon shoppers already feel empowered to share reviews on the website, and this can turn into one of the more powerful feedback and communications methods for your brand.
Well-known consumer brands that already sell on Amazon use it as a complement to their direct-to-consumer relationships. Having another impression point can strengthen their brand equity, adding another touchpoint in their omnichannel strategy.
Amazon’s acquisition capabilities lie in its search function. The search/purchase life cycle is changing — more than 50 percent of consumers begin their search not on Google, but on Amazon. If done right, visibility on the platform can be a direct line back to your website as consumers seek out more product information and details that aren't available on Amazon. This also provides a good opportunity for consumers to learn more about your brand through content, thought leadership and special offers that may only exist on your website.
It’s clear Amazon isn't going away. E-commerce brands that learn to work with Amazon, not against it, can reap the benefits of having a powerful partner that helps launch your company into the next stage of growth.
Alex Song is CEO and founder of Innovation Department, a technology and investment company that creates and develops e-commerce, media and SaaS companies.