It’s no secret that Amazon and other ecommerce and tech innovators continue to raise the bar when it comes to customer expectations.
Retailers can thrive in this competitive environment, provided they make no compromises when it comes to differentiating and optimising themselves so they can stand out from the pack.
“Many manufacturers and wholesale distributors have been profoundly impacted by the Amazon effect, even if they don’t compete directly with Amazon,” reads Oracle NetSuite’s latest Surviving the Amazon Effect report.
As its name suggests, the Amazon effect refers to Amazon’s influence.
It can dramatically raise customer expectations for things like frictionless commerce, personalisation, the range of products available and the information relating to each item, and fast, reliable and cheap or free delivery and returns.
If anything, the boundaries between retailers, manufacturers, brands and wholesale distributors have become blurred. For example, it’s becoming increasingly common for well-known fashion brands that do not have any standalone stores to skip their retailer stockists and sell directly to consumers via an online store.
The expectations of customers – whether consumers or businesses – have also changed. Customers now expect to be able to view detailed product information, configure, order, check status, and request returns or report issues online 24 hours a day, seven days a week. Retailers who provide this without any exceptions often have high online conversion rates, or high numbers of returning customers.
Manufacturers and wholesalers are also being forced to become proficient at fulfilling a large number of small orders consisting of just a few items, thanks to retailers putting pressure on them to hold inventory and delivery directly to their customers. They’re expected to do this while continuing to fulfil large bulk orders as traditionally done. This means manufacturers or wholesalers have to adapt completely different models for order management, warehouse management, inventory management, material handling, pick, pack, ship, and logistic/transportation management.
Oracle NetSuite’s report says that if your business has not adapted with the times and embraced these new ways of trading with customers, then there’s a chance your business could become untenable.
The report suggests ways to manage the changing expectations via a clear, effective two-pronged strategy: differentiate and optimise.
While it may be impossible to “out-Amazon” Amazon, if a retailer strives to adapt an integrated system, with full omnichannel capabilities, then it is well on the path to achieve its goals through the differentiation and optimisation needed for success.
Click here to download Oracle NetSuite’s Surviving the Amazon Effect report to learn ways leading retailers are differentiating themselves from Amazon and recommendations on how to optimise your business execution and improve customer satisfaction.