Don’t fear Amazon: use it to your advantage

As endless think pieces spell doom and gloom for Australia's impending Amazon invasion, Men At Work Communications creative partner Michael Willcocks argues local businesses need a shift in perspective.

Much like the river after which it is named, there is a sense of crushing inevitability regarding Amazon’s impending arrival upon Australian shores.

Your standard punter is understandably excited – the biggest online retailer in the world will finally be delivering their goods to our doors, creating a whole new level of competition, which will surely lead to cost savings and new levels of efficiency and quality.

But it’s for those same reasons that a number of local brands are understandably feeling pretty nervous, and that anxiety is passing down the line to the agencies that work with them.

Not just big, a true behemoth

When you think Amazon, you probably think ‘big online retailer’. But let’s get some perspective on just how big we’re talking.

For those who aren’t avid potamologists, the Amazon isn’t just the largest river in the world, it discharges more water per year than the next six largest rivers combined.

Back in 1994, while founder Jeff Bezos liked the moniker Amazon as it would see his online bookstore located near the top of any alphabetical list, the name of this mighty waterway also reflected his own personal ambition.

As Ann Byers wrote in ‘Jeff Bezos: The Founder of Amazon.com’, “The river was not just a little larger than all others; it was ten times larger! His bookstore would not merely top the competition; it would leave all the others far behind. Yes, the name was ideal.”

Creating the biggest store in the world was a pretty huge ask for a guy who had just quit his job and planned to sell books out of his garage, yet less than 25 years later, Amazon is indeed the largest company on the internet by revenue.

What’s more, having long ago expanded well beyond books, Amazon took Walmart’s mantle in July 2015 as the most valuable retailer in the United States.

So while we in Australia may have felt our fries were too small for Bezos’ e-commerce giant, when Amazon finally announced they were setting up a warehouse in our neck of the woods this year, plenty of businesses were suitably terrified.

Really though, it’s a bit like being scared of the dark – whether an inability to see what’s beyond your backyard is a logical fear or not, night time is going to fall.

Amazon is coming. So embrace it.

Amazon doesn’t want to destroy you

Many of the marketing heads I talk to, who currently have big customers in national bricks-and-mortar retail chains, are asking what they need to do to prepare for Amazon’s launch.

The good news is that Amazon will actually be doing lot of the work for brands, putting a huge amount of money behind their startup in Australia.

In fact, they recently announced the Amazon Marketplace Seller Summit in Australia, a free event for all local businesses – “ranging from established retailers and e-commerce businesses, through to new start-ups looking to bring their products to millions of customers across Australia and around the world” – looking to get in on the ground floor with Amazon in Australia.

Furthermore, unlike in America, where brands put their spend into Amazon’s priority search and sponsored listings, we Down Under are likely to see a slower burn. Directing traffic to Amazon through search and digital activities will be key to success.

Essentially, while bricks-and-mortar businesses may feel threatened, the reality for most is that Amazon doesn’t want to destroy you, just to get a piece of the action.

And, logically, they want to help push your wheelbarrow – sure, they’ll take a chunk of your sales, but they’ll aim to more than offset their percentage by improving your overall bottom line.

Therefore, businesses should be thinking long and hard about how they plan to optimise their products and their business in the Amazon marketplace. The businesses that suffer from the arrival of Amazon will likely be those who ignore its arrival.

Where do agencies fit in?

According to UK web research outfit Baymard Institute, a massive 69.23% of online shopping carts are abandoned.

Put another way, only 30.67% of people who use an online shopping cart actually complete their purchase. More than two-thirds of people actually put the ‘item’ in their cart and then don’t complete the sale.

To get an idea of just how much money that’s being left on the table, Statistica estimates global ecommerce sales to be worth around $US2.29 trillion in 2017. And that number is set to double by 2021, all while 70% of potential sales fail to convert.

Rupert Murdoch’s rivers of gold – the classifieds in his papers – haven’t dried up, they’ve just flowed into Amazon!

Thus, while Amazon brings a new dynamic to the local market, the fundamentals of what agencies will be doing isn’t going to shift significantly.

Agencies need to find ways to drive people to their clients’ Amazon marketplace, and then ensure the marketplace is populated with rich content and solid product information, which therefore converts consumers there and then.

Obviously there’s a new platform to get our heads around, and that will take time, but at the end of the day, Amazon is simply a marketplace. And whether it’s physical or digital, agencies have pretty well always made their bread and butter from helping marketplaces flourish.

So yes, Amazon is coming, but no, don’t panic, and for God’s sake don’t try to battle the raging torrent.

Michael Willcocks is creative partner at Men At Work Communications.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.