Thursday 11 May 2017

The One Thing That Amazon Does Really, Really Well Is Not New

Online retailing giant, Amazon, is the saviour or wrecker of retailing, depending on how you look at it, and they are coming to Australia. The ripples of concern  amongst Australian retailers are testament to the disruption that Amazon is causing. The new kid on the block is having immense impact but is it really doing anything different?

Amazon has taken the retail world by storm and their online influence is particularly impressive. CNBC recently reported that over 65% of online retail sales growth was attributable to Amazon. And a staggering 27.4% of all retail growth (this is in the US) was Amazon’s.

Amazon does a lot of things really well but the standout might be that they make themselves the first choice if you want to buy something. They have everything. And if they don’t have it in their store, they will show you somebody else who has it, and you can still buy it through Amazon. They will sell things at very small margins just so they can meet all consumer needs. You can buy computers that are shipped direct from a whole range of different suppliers. You can order fresh food that is delivered the same day (sometimes within the hour). The odds are that if you type a product or service into the Amazon search box it will come up with an option.  It is the ultimate one-stop-shop.

Isn’t that exactly what Macy’s, Sears Roebuck, Walmart, and in Australia, David Jones and then Myer, did? - providing the convenience of a single source in the case of early catalogues, and then department stores that put a whole range of goods under one roof. Amazon does the same thing but bigger, and it uses technology to add a modern twist with lots of convenience.

The spin off for consumers is that they expect all retailers to do similar things. How often do you get asked by a customer “Do you have a website?” And if you answer yes the next question is usually “Do you have more goods on your website?” Like it or not, customers are expecting great things from every retailer including market traders.

So what is the significance of all this for QVM? We have a very broad product range at the market although there are gaps and bringing them all to customers in a convenient package is not our strength. We know we need a better customer information system.

For individual traders, maybe some of us could take a leaf out of Amazon's book and offer a wider range of products online. What was that popular phrase in the TV series Star Trek – “Resistance is futile”?

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