The Future of Retail in the Age of Amazon
In 1994, Jeff Bezos started an online bookshop service from his garage. He called it Amazon. In the early stages, every time someone made a purchase, a bell would ring. It’s no surprise that they don’t have that ritual anymore with 206 million people visiting Amazon every month and a product inventory of 12 million. Jeff Bezos now runs a business with revenue equivalent to the 51st richest country in the world.
Amazon has changed the retail landscape and called companies to optimise their online presence or fall behind. Internet sales brought in £76.04 billion in the UK alone in January 2020. So, in the current climate where online is everything, can you stay ahead of the competition?
Well, yes, Amazon has called businesses big and small to have an online retail platform due to customer expectations. But now businesses can’t afford to not be online and are doing everything they can to improve their online operations. So, how can you build a thriving business model in the Age of Amazon?
1. Provide new customer demands and trends
Retail is one of the fastest moving sectors and Amazon is successful because retailers and consumers trust that it will deliver up-to-date products and services. As a huge company, they also have countless reviews from customers who can testify to this. When selling through Amazon, the site will provide you with data that can help you keep track of consumer demands and trends. Ensure you collect that data and use it to your advantage — you want to tailor your products to your customers in order to gain their loyalty.
If you move to sell outside of Amazon, these customers may follow you to another third-party site or your own site. Alternatively, having an omnichannel presence can expand your reach. When selling outside of Amazon, artificial intelligence (AI) focused technology provides companies with metrics and customer data, which helps your business understand four important things:
- What different types of customers you have
- What motivates them
- Where your opportunities to grow customers lies
- Where the right future customers can be found
Once you have all of this information at your fingertips, you know what it is that your target customers are looking for. In turn, you understand what products, services and trends you should add to your supply chain. Using technology to gather that information allows you to keep up with the fast-changing fashions because you’ll spend less time on manual data tracking.
2. Use a recommendation engine and remarketing
There’s another way that you can access specific customer data and that’s with a recommendation system. These are information filtering engines that predict the preference that a user would give to an item. Consumer behaviour information then assists you in targeting who and what you advertise and a higher success rate in return.
This is where remarketing comes in. A huge 75% of buyers are more likely to buy from your shop if you recommend items based on their past purchases. Using cookies is a great way to improve your returning customer rate as well as bagging new customers.
3. Deliver a modern and uncomplicated online experience
87% of customers think that online shops need to put more effort into providing a seamless and efficient online experience, and this couldn’t be more relevant today. Keeping up with ways to provide that is crucial, especially if you want to mirror companies like Amazon who are renowned for their convenience and speed.
The best way to achieve this is to use AI-driven technology to enhance your product listings and ensure your omnichannel presence is effective. AI technology is becoming more mainstream, so don’t avoid it or you’ll get left behind. Certain AI-driven software can provide an end-to-end overview of your product lifecycles, allowing you to see exactly how your products are selling and provide actionable insights to improve your margins.
In the era of the ever-changing shopping experience, you can take it one step further than that. And that step is inventing and partnering with new online retail options. For example, Amazon isn’t just Amazon. It’s Amazon Pay, Amazon Prime and Amazon Go with Amazon Prime having 26 million subscribers alone. The future of surviving in the Amazon retail age is to get involved with automation and offer new services like these.
4. Learn from Amazon’s best practices
As an online retailer, you can learn a lot from Amazon. In fact, your online retail journey may start at Amazon or continue to be part of your omnichannel operations. Either way, you need to use the site to your advantage.
Not only should you be learning the best practices that Amazon implement across their site — for example with the way they enhance their product listings — but you should also be looking at and adopting features Amazon implements on your own Amazon listing, your own website or both.
Features such as offering bundles can help with upselling your products, ensuring you increase your revenue even more while keeping customers satisfied. This can be achieved through tracking particular metrics and finding trends in consumer buying habits. This will help you gain insights into your customer base as well as visibility over your business’ performance as a whole, which we’ll cover more thoroughly in the next section.
Figuring out what to list on what channel (whether that’s on both Amazon and your direct site, or any other third party sites) can be difficult. It can help to look at buying patterns to help make sure each product is fit for particular channels. This can also assist in tracking your spend for each product so you know you’re not overspending on inventory that doesn’t sell, for example.
You also need to ensure you are doing everything you can to optimise your listings on both Amazon and any other channels your products are listed on. Certain AI software can help you do this — and the right AI platforms can go even further and gather data to help your business make informed decisions that are aligned with your company’s goals.
5. Focus on metrics
A significant way that companies in the retail industry can struggle to compete online is siloed departments and a confused business goal. As we mentioned, AI-driven software can help retail companies target customers and deliver quality customer experience. But, you’re not getting the best out of the software if it doesn’t offer you the ability to view your overall performance.
Certain AI-driven software can do just that, not only giving you a 360 view of your product lifecycles, but also using your performance marketing data, business metrics and trending data to create an overview of your whole business to ensure your objectives are aligned. Aligned goals will also help departments from becoming siloed so you know everyone across the business is looking at the same metrics and working towards the same objectives — an issue that can stop you from getting ahead of your competition.
Now retail is focusing around revenue, and in turn, margin. Online retailers should be focusing on revenue growth and weathering the current storm. Don’t underestimate the power of getting an overview of your business performance and how it aligns the whole company’s goals. This brings every department together to work towards a united goal, making survival easier. With this technology, your business will be united, stronger and harder to shake in the fight against huge online retail sites.
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