Black Friday focus: Fending off the threat of Amazon

by | Nov 23, 2018 | Discussion

There’s no getting around it – Amazon are massive. In 2017, they made over $1 billion in sales on Black Friday alone, with that figure almost certain to rise this year. Their vast Black Friday and Cyber Monday sales spans an entire 10 day period, with thousands of deals covering all manner of products and services. But this is just one small part of the larger Amazon engine, one that seeks to influence an ever increasing amount of our everyday lives. In the US this year, they made headlines with their purchase of grocery merchants Whole Foods for $13.1 million, giving them a presence in the vast American grocery market. This aggressive move into a bricks and mortar grocery business is part of a long-running trend of the company investing in companies who boast specialisms in different markets. This can be seen in their acquisitions of streaming platform Twitch, and the movie information website IMDb, to name just two of the more well known brands. The investments shows that Amazon are interested in continuing to diversify their portfolio of products and services they offer, as they look to take their business model into new markets, both physical and online. 

So, how did you fend off the threat of a massive company, who’s prices and delivery services you cannot hope to match?      

Identify and promote what makes your company special

It could be price, locality, service, product knowledge, attention to detail, personal connection to customer, brand image, superior quality or value for money. When it comes to ecommerce, brand ownership and exclusivity are important as well – the internet is a demanding and competitive market, and keeping your brand exclusive and maintaining its image can be a good method of promoting what makes your brand special.

Amazon have the resources and economies of scale to undercut your business on price, marketing and access to the customer, but having such a vast unending product portfolio means that they are unlikely to have specialist knowledge of all products, and certainly not on the end of the phone with a customer. This is where other retailers, large and small, can differentiate themselves. For an in store example – The Independent reported Dixons started doing this in 2017, by neutralising the threat of price through price matches in store to stop people trying the product then heading off to buy online. They then attempted to add value by bringing in experts from Apple and Dyson into their stores, to offer expertise and knowledge of products that simply cannot be matched by online retailers, and also added coffee machines into stores to create a more relaxed and welcoming atmosphere. To offset the price matches and increased investment that cut into profit margins, they began to offer supplementary services such as technical support and product repairs. Diversifying to not become reliant on singular revenue streams helps Dixons to continually fight off the threat, with a clear emphasis on adding meaningful value on to the customer experience when shopping and purchasing, through having the specialist knowledge in store to talk to customers face-to-face, and a warm, friendly approach to customer service. 

For an ecommerce store, you can add value in different ways. Adding different content and features on your site, such as product reviews, videos, the ability to save baskets and create wish lists are all feature that are becoming an increasingly compulsory part of modern ecommerce. Amazon has all these features and more on their site, so it’s important to personalise these features so the customer gets a better sense of the company and the products they are buying. A video on the homepage could be a review of a new product, or a blog with the latest news about the company. Personalisation, and demonstrating a deep and considered knowledge of the products you are offering, demonstrates to the customer that you are a reputable company that they should trust to purchase goods and services from. 

Another factor that can bring customers to your ecommerce site is the promise of brand ownership and exclusivity. Amazon boasts a huge range of products and brands within its directory – a mixture of own brands and outside companies who sell on the platform. So, the benefits of avoiding having your products on that mean you are controlling the supply and price of your products, which can form part of your USP, as it allows you to set your own terms of the sale, and control who sees your products, and the price they pay. That element of control also extends through to the brand image, as the company can set out their own specifications for where the product is sold and how the product is being marketed. This is the argument many brands go through when discussing the option of selling their products on Amazon. Whilst the ecommerce giant does offer some larger brands protection from counterfeit and unauthorised sellers distributing their products, there is undoubtably a loss of control surrounding how the brand is seen by customers, which comes with the decision to open up to the larger market and customer base that Amazon provides. So any decision about whether or not to sell products through the Amazon system must be scrutinised, and it’s effects understood. 

Focus on specialism

It’s important, whether your business is a physical location or an ecommerce site, to understand and promote what your specialism is. A specialist approach to selling your products or services involves having a clear understanding of what you offer, and the benefit to the customer of purchasing through your business. This can be done through product testing, to get a better understanding about how it works in a practical sense, which can then be passed onto customers to allow them to as informed as possible before purchase. That specialist knowledge can often be the difference between a company choosing to purchase from your business above others, so it’s important that it is clear demonstrated that the staff possess that knowledge, and that they are in a position to help the customer through the whole process of identifying the appropriate product or service, through to eventual purchase, and, in our case, ongoing technical support and advice. 

At Liquidshop, we like to think that our specialism is support. We provide continuous ongoing technical support for our clients websites, keeping them secure in the face of ongoing threats such as malicious login attempts and spam. But we are also on hand to offer advice on a range of issues concerning ecommerce and web development. We have found that having a personal connection with out clients, through phone calls and face-to-face meetings, creates a comprehensive knowledge of the website and enables any issues to be solved quickly and easily. We strive to continually invest in our support services to ensure that clients feel secure in the knowledge that their site is being maintained by skilled employees that know how to produce and maintain great ecommerce websites.

Whatever your companies specialism is, it’s vital that it’s developed and understood to ensure that customers know exactly what knowledge you have, as this makes it clear why they should buy products or services from you. 

New threats from Amazon

Even with all the efforts you put into building up your USP and specialism of your brand, and ensuring that you keep the ownership of your product, Amazon can still find ways of infiltrating your market with their own products or services. The establishment of their Amazon Basics range of products is a further example of the company diversifying the range of their products, in an attempt to pursue as many different markets as possible, and use the traffic to their sites as a platform to buy their own products. In the news recently have been discussions around the company copying successful mid-priced products in various markets, and establishing their own Basics version, affecting a wide range of products, such as mattresses, tech accessories and personal care. Existing brands in the mattress industry have fought back, however, by reinforcing their USP of price and customer service, and a personal approach to communicating with customers that can’t be matched by Amazon. That knowledge of the product and personal approach is something many retailers rely on when competing with larger brands, with knowledgeable and well trained staff acting as the face of the brand, and on hand to answer questions and offer advice. Brand loyalty also keeps customers coming back, and their’s no substitute for the quality of the product generating organic word-of-mouth interest.

Final thoughts

Amazon is a ubiquitous presence in our lives. In 2017, it was estimated that around eight million UK homes owned at least one Prime memberships, with a further study suggesting that 77% of ecommerce using adults in the UK were directly influenced by the online giant. They threaten to take over our lives, becoming increasingly influential through their acquisitions of companies in different markets, in a continuous attempt to diversify their product portfolio. Businesses will have to be creative and committed in their attempts to fight off the threat of Amazon, and ensure they continue to invest time and money into their USP. 

More articles on the subject: 

https://www.independent.co.uk/news/business/news/dixons-carphone-amazon-online-retaielrs-electric-grocery-fashion-industry-mobile-phones-a7820406.html

https://edition.cnn.com/2018/10/31/business/amazon-mattress-casper-beds/index.html

https://www.nytimes.com/2018/06/23/business/amazon-the-brand-buster.html

Dominic Mayo

Dominic Mayo

Marketing Exectutive

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Give us a call on 01174034072 or send us an email on hello@liquidshop.com.

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