With Click Frenzy kicking off tonight and amid warnings over the state of Australian e-commerce Mark Troselj says there are some simple things local businesses can do to beat international pure-plays like Amazon at their own game.
Warnings by GroupM’s digital boss last week that Amazon has the potential to crush Australia’s e-commerce market “like an Anaconda” should not be written off as hyperbole. Too many Australian businesses have been slow to grasp the enormity of the wholesale transformation of the global retail sector and have procrastinated at the expense of market share and current and future revenue streams.
Alarmingly a recent Frost and Sullivan report ‘Disrupt, Collapse, Transform,’ revealed that although digitalisation, new disruptive competitors and new business models are driving change, only 38 per cent of Australian retailers have the ability to transact online.
You read that correctly.
In a world where yesterday’s consumers are rapidly being replaced by tech-savvy web and mobile users who now expect to research, price-shop and buy without picking up a phone or going in-store this, 62 per cent of Australian’s are effectively ruling themselves out of the game. With Nielsen recently reporting that six out of ten Australian’s taking a multi-channel pathway to purchase (according to Nielsen’s “Australian Online Landscape Review’) and US retail juggernauts on the way, which seems like retail suicide. But crucially, it is entirely avoidable.
Because, whilst Amazon has written and re-written the rules of ecommerce globally since the late 1990s, and will no doubt continue to do so, Australian retailers large and small now have access to resources and technology that can be quickly implemented to get them back in the game. Better yet, that technology is invariably in the cloud which means lower capital expenditures, faster results, real-time data and the ability to instantly scale.
Local online retailers have the real opportunity to exploit local brand awareness and leverage their physical stores to reduce shipping costs, improve delivery time and cut inventory carrying costs, with the potential to beat Amazon at its own game. Then they can use their brick-and-mortar stores to create advantages Amazon can’t match – particularly pertinent given the rise of the multi-channel path to purchase and as retailers are beginning to experiment with iBeacon technology, not to mention the potential of the next wave of wearable/Internet of Thing devices and applications.
How to escape the Anaconda’s grip First and foremost, Australian retailers need to choose the right commerce software platform to drive their ecommerce operations and manage its integration into their bricks and mortar presence if they have one and as well their financials, shipping, order management, inventory, supply chain and warehouse.
It needs to have real-time inventory updates, customer self-service, one-click reordering, easy search functionality and the ability to promote products dynamically. This will invariably be found with a cloud-based commerce management solution irrespective of whether it is a small online retailer or large multinational.
Superior shipping and fulfilment is also fundamental. Ship to your customers faster and they will be delighted. Ship to them more cheaply and profit will go up. Accomplish both goals by shipping from the location nearest your customer, whether that is a warehouse, distribution centre or brick-and-mortar storefront, and you’ll cross fewer kilometres with each shipment realising both reduced shipping costs and improved delivery times. You can also turn a store into an asset by offering purchase online and pick up in –store, shop to home but exchange in-store.
Ever cognisant of the changing e-commerce landscape, Australia Post recently launched its new 24/7 parcel lockers in key urban areas to make the shipping and collection process far more convenient for both retailers and consumers. A new major advertising campaign launched by GPY&R Melbourne is expected to help drive purchasing from busy professionals who don’t have time to collect parcels during office hours (indeed we recently partnered with Australia Post to help our online retail clients transform delivery and collection processes).
As customers demand a smooth and personalised journey to purchase, it is imperative to nail marketing insights and strategies. It’s true that Amazon wrote the book on this, but there is no reason that the ‘smaller guys’ can’t do just as well. The tools are out there to enable businesses of any size to precisely identify, segment and target consumers in granular detail, without requiring an army of analysts or a resident actuary genius to decipher. Loyalty programmes, targeted discounts and personalised EDMs are all simply executed at the push of a button.
We have seen countless Australian businesses transform their operations, and ultimately their profits, by changing their fundamental business platform and moving away from the disparate business systems of the past. Just as the silos of advertising and marketing are merging into true cross-channel and platform campaigns, so are the business processes that underpin them. Customers increasingly expect a seamless and consistent omnichannel retail shopping experience, regardless of whether they shop in-store, online, or telephone and catalogue across any mobile device.
Despite Amazon’s global domination, businesses don’t have time for the luxury of fear – they must begin to transform. The good news is that there are many strategies and solutions that Australian retailers can adopt to remain viable and beat Amazon and other major B2C e-commerce companies at their own game.
Mark Troselj is managing director of Asia Pacific and Japan for NetSuite