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Amazon: From a perceived threat to an opportunity

19/04/2018

Amazon: From a perceived threat to an opportunity

 

Isobar’s Roxanna Larizadeh talks about how brands can succeed in a retail landscape dominated by Amazon.

Last month, Amazon overtook Alphabet to become the world’s second most valuable company.

Both brands and retailers alike envy Amazon for its perpetual ability to increase its share of consumer spend. At the same time, they are fearful of the way Amazon is relentlessly focused on becoming the ‘everything’ store.

What separates Amazon from other businesses is its uncompromising pursuit of both innovation and optimisation. For most businesses, one usually comes at the expense of the other; by fine tuning performance and finding operational efficiencies companies risk sacrificing their inventive spirit in the process.

For Amazon, innovation and iteration are not mutually exclusive. It’s impossible to separate Amazon’s ascension from CEO Jeff Bezos’s commitment to experimentation. Bezos is not afraid of failing quickly to learn quickly and believes the possibility of a big win outweighs the cost of many small losses.

Amazon Fuels A Culture Of Instant Gratification

The services offered by Amazon are fuelling a growing culture of convenience.

Amazon caters to a society that places instant gratification high on the list of daily needs, to the point where some consumers now see Amazon as a utility supplier akin to water, electricity and gas providers, rather than a retailer.

With Amazon Prime as the foundation of this pioneering model, the business has been able to drive customer retention.

Consumers today are fully aware that no other competitor can deliver the same level of service at scale.

Ultimately, Amazon’s goal is to be the single entity consumers turn to for their everyday needs – omnipresent in your home, car and workplace through Amazon Alexa.

It’s not unreasonable to surmise that its vast catalogue of products and services will one day see Amazon replace Google as the world’s leading search engine.

If You Can't Beat Them, Join Them

Despite this relentless pursuit of consumer hegemony, we at Isobar believe there is a way for brands and retailers to thrive in a landscape dominated by Amazon.

eComm@DAN is a new business practice set up to help clients determine their Amazon marketplace strategy; specifically how to improve their product page experience and at the same time optimise their use of media onsite to drive incremental sales.

The practice introduces a proprietary approach to understanding how to bring retail and media together for growth through a three-pillared approach: Identify, Codify, Amplify.

Identify: we identify the opportunity for our clients to adopt an Amazon strategy (if they are not already present on the Amazon marketplace), or to optimise their existing strategy on Amazon (should they already be present on the marketplace).

Codify: we review the approach and operations for our clients to adopt, or drive, their Amazon marketplace strategy. This phase includes the identification of the right operating model/team structures required in-house for our clients to work with Amazon on a day-to-day basis.

Amplify: steps one and two allow us to amplify our clients’ brands and products to drive sales on Amazon. This phase involves auditing media and ecommerce budgets, defining and overviewing KPIs, and reviewing/optimising campaign performance. In this phase we can also help brands and retailers maximise their product assortment and optimise their merchandising strategies on Amazon.

Amazon have successfully manoeuvred themselves into a winning position where they can pervade people’s lives for years to come. But the story doesn’t have to end there. Brands can, and should, capitalise on the opportunity to leverage Amazon’s strength for their own advantage.

If you’re looking to develop, or optimise, your Amazon marketplace strategy, email us at HelloIsobarUK@isobar.com to speak with one of our consultants.

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