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Expert advice for how businesses can survive Amazon’s arrival

As part of a recent feature series on Amazon’s Australian launch, our panel of retail experts –  Massey University’s Professor Jonathan Elms; Sell Global’s Hamish Conway and Retail X’s Juanita Neville-Te Rito – each offered detailed advice on how retailers should adapt their offering to be more resilient against the Amazon effect. 

We’ve compiled it into these handy bulletpoints.

  • Make sure you have a point of difference, whether that’s a unique product or a stand-out retail offer.
  • Have your own ecommerce platforms and keep them well-maintained.
  • Concentrate on customer experience. Make sure your physical stores are modern and fit for purpose, and invest in developments that will let you create an in-store experience that can’t be replicated online.
  • Staff training, particularly in customer services, is vital as it feeds into both your brand-building and the customer’s perception of your physical offering.
  • Build your direct marketing relationship with customers. This means developing and retaining a good understanding of your customers and what makes them tick.
  • Invest in integrated clicks and bricks strategies that connect your store and online platform seamlessly.
  • Engage directly with Amazon by setting up a marketplace shopfront, but only if you’re willing to take the project seriously and execute it competently. Those who don’t have the resources to research deeply and commit to the project are be better off not bothering.

But what do members of New Zealand’s retail scene think of Amazon’s potential arrival?

Booksellers NZ: Describing Kiwi booksellers as “looking nervously towards Australia”, the organisation called for shoppers to think local on NZ Bookshop Day, October 28.

“It is more important than ever to remember what you love about your local bookshop, and why it is you need it in your life,” urged chief executive Lincoln Gould.

Briscoe Group: In the homewares and sports gear retailer’s 2017 interim report for the period ending 30 July 2017, chair Rosanna Meo and group managing director Rod Duke linked the threat of Amazon to a general environment of competition:

“The competitive environment has remained intense. Some smaller retailers have gone into receivership; others are looking to divest non-core assets and focus on revitalising their primary retail businesses. Amazon’s expansion into Australia will ensure that retailing remains tough, and successful retailers will be those who continue to offer compelling propositions to their customers. We believe that our mix of retail and product brands, our low cost base and our ability to respond quickly to market changes positions us well as we move forward.”

Visa: When The Register spoke with Visa’s country manager for New Zealand and the South Pacific, Marty Kerr, in August, he had recently returned from a visit to Sydney. He confirmed that retailers there signalled concern about Amazon’s recent entry into Australia: “There’s a lot of nervousness about the unknown in the Australian market.”

Kerr himself was optimistic about the ability of Australian and New Zealand retailers to weather the storm of Amazon’s arrival. He sees price, fulfillment and a frictionless customer experience as Amazon’s key differentiators, “but they haven’t got a monopoly on it. No way.”
Customers seeking a transactional experience will come to Amazon, but some will want a more tailored, human kind of shopping interaction, Kerr predicted: “That’s a huge opportunity for New Zealand retailers.”

Trade Me: In an interview with NZ Retail, Trade Me chief executive Jon Macdonald credited Trade Me’s urgency towards growth and improvement to the imminent arrival of Amazon, but said being a local company which knows its customers well gave Trade Me an edge.

“I personally, and we collectively here, operate with a healthy degree of paranoia. I think it would be dangerous and eventually fatal for us to be complacent. Inherently that means there is a degree of worry, you need to maintain your urgency and I think Facebook and Amazon have been helpful in one sense; helping to galvanise everyone we have here in terms of the work we have got to get done.”

He also praised Amazon for its ability to grow online as a whole, both in New Zealand and overseas, noting that its arrival may not be without its benefits.

“It’s not going to be a scene out of Terminator Two, where Amazon arrives crushing all of our charred skulls into the ground. There is room for us all, and I’m very confident that we can continue to grow and succeed. Having that level of urgency is an important part of us being able to do that.”

This story originally appeared in NZ Retail magazine issue 753 December 2017 / January 2018

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