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Digital TransformationStrategy & LeadershipTechnology empowers companies to remain agile against Amazon, whether they’re David or Goliath
Technology empowers companies to remain agile against Amazon, whether they're David or Goliath
Amazon’s dominance has certainly hurt many retailers, but new technologies allow marketers to be agile and remain competitive, no matter their company size.
Author
Mike O'Brien
Date published
December 1, 2017
Categories
Strategy & Leadership
A few weeks back, we compared Amazon to Freddy Krueger. But while he is certainly coming for you… that doesn’t necessarily mean he’s going to get you. Heather Langenkamp’s character survived her Nightmare on Elm Street and went on to appear in several sequels.
Amazon’s dominance has certainly hurt many retailers. But more than that, it’s exposing the companies who aren’t keeping up with our ever-evolving world. Deacon Webster, Co-founder and Chief Creative Officer at Walrus, points out that Amazon itself is actually disruptable in its own way.
“Affinity for Amazon really comes down to convenience: I love what you do for me,” he says. “People love Apple products, but before Alexa, Amazon’s attempts to move into consumer goods haven’t been as deliverable.”
A colossal comeback
The growing popularity of ecommerce has had a profound effect on traditional retailers. According to Adobe data, last week’s Cyber Monday, not Black Friday, was the biggest sales day in history with $6.59 billion. Barnes & Noble and Bed Bath & Beyond are both coming off disappointing earnings reports, with the latter recently experiencing its worst stock decline in five years. Toys R Us filed for bankruptcy in September and stayed open for 30 consecutive hours during Thanksgiving weekend.
Walmart was another company on that list, as the world’s largest retail experienced a series of poor quarters a few years back. But the brand has been prioritizing ecommerce and technology heavily: acquiring a 12.1% stake in Chinese ecommerce marketplace JD.com, increasing its number of fulfillment centers, introducing free two-day shipping. There’s been enough of a comeback that Walmart, of all companies, is now being heralded as a “digital disruptor.”
“Walmart has also acquired assets like Jet.com as a way of compensating for their own lack of digital competence,” says Evan Neufeld, VP of Intelligence at L2, Inc. “Traditionally, this has been an iffy strategy, but it seems to have paid off for Walmart. At the same time, Walmart is trying to double down on anchoring its value propositions into the physical stores.”
According to a CNBC report, Walmart’s ecommerce revenue is up 50% year-over-year.
The company has gone full-circle and is now seen as a threat to Amazon, using essentially the same strategy. Amazon continually beefs up its offerings and expands its expertise through new acquisitions. This year alone, Amazon has bought three artificial intelligence companies, a delivery app, “the Amazon of the Middle East,” and of course, Whole Foods Market.
The small brand advantage
This approach isn’t only for big dogs. Walmart has a lot of money, but its size can also be a disadvantage.
“Bigger companies have a lot of legacy systems they need to deal with. Walmart might have one database for their CRM or 500 databases for individual points of sale data,” says Neufeld. “I think the real advantages are an ability to get to the single view of the customer and focus. Focusing on a small, narrow product category, there is an opportunity to be a disruptor, be it in luggage, razors or cosmetics.”
An end-to-end ecommerce platform, GearLaunch helps smaller businesses by providing this technological agility. The company gives small merchants all of the tools necessary to run their own online shop, including access to the global supply chain and operational support.
“Merchants want to build their own brands independent of Amazon’s generic product listing pages, but can’t do that without the platform and infrastructure to support all aspects of their businesses,” explains Thatcher Spring, GearLaunch’s founder and CEO. “A lot of our merchants are excellent at marketing and acquiring sales, but will struggle with everything that comes post-purchase.”
Selling your products on Amazon can be a double-edged sword. Walrus’ Webster points out that your discoverability will likely be much higher, even if you’re essentially “competing with yourself.” But at the same time, Amazon is still in charge of prices and algorithms.
Spring adds that the ecommerce giant also gets to own the customer experience. His company “platformizes” logistical functions such as customer service and fast shipping: Amazon’s sweet spot, where small businesses often struggle.
Conclusion
Far beyond ecommerce, agility it’s about surviving and thriving in general. At one point, Amazon was a bookseller that has spent the last 20 years evolving into an “everything store.”
A smaller size used to be a hindrance for companies going up against large global players with companies that have scale and operational efficiency. Technology empowers everyone to stay competitive and fix what’s missing, whether they’re David or Goliath. Walmart is the world’s largest retailer with more than 11,000 locations; GearLaunch has clients with less than five employees.
But one thing they have in common is using today’s innovations to stay adaptable and competitive.
More about:
Adobe Alexa Amazon Apple Barnes & Noble Chinese ecommerce CRM Digital Disruption digital transformation ecommerce holiday season JD.com NBC Universal Toys R Us Walmart Whole Foods Market
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