Since Amazon announced it would launch its full Dutch webshop, amazon.nl in 2020, we’ve received numerous questions from clients, prospects and opinion leaders about what this move will ultimately signify for the e-commerce world in the Netherlands. We asked our CEO, Jan-Willem Roest, what the arrival of Amazon will really mean.
Amazon leads with low prices
It is common knowledge that Amazon likes to keep its prices lower than everyone else’s. During the 2019 festive season in the US for example, their prices were approximately 20% below the average*. Is price enough to convince a loyal Dutch consumer to switch allegiances?
JWR: “Dutch consumers are very price sensitive, so there will certainly be some that make the move to a platform that offers the best price for a certain product. We are, however, also very loyal consumers. Once we are used to certain service and experience, we tend stay loyal to that particular platform.”
Amazon is landing in the Netherlands at a time where there are a number of well-established local retailers, do you think that they will struggle to grab market share from the local heroes?
JWR: “There is still enough opportunity in e-commerce for everyone to profit. There will not only be one party dominating. There will be more large platforms coming and lot of niche, specialty platforms who can all be very successful.”
Will delivery win in the Netherlands?
Amazon offers Prime membership, which offers quicker and free delivery, plus the Amazon streaming service. Bol.com offers a similar product in Select. It seems that a lot of the focus is shifting to the delivery of products when it comes to winning customers, but just how much quicker or better can delivery get?
JWR: “Delivery in NL can only be USP if we are talking about the costs. Speed of delivery, in a relatively small country with such a well-developed infrastructure, should not be a challenge. Overall customer experience, product range, exciting new services like streaming and access to innovative and new products will be the most important differentiator (apart from costs, obviously). Once one of the platforms really makes the move to everyday shopping and have groceries integrated, this could be the turning point. So, if Amazon for example, buys Picnic, then the local players should really start to worry. Picnic is still small, but already has the access to the front door of the consumers that Amazon ultimately requires.
It will be interesting to see how Ahold will capitalise on the acquisition of Bol (which happened 8 years ago already…) and how the strategic partnership between Hema & the fast-growing grocery chain Jumbo, will develop. These partnerships and how they grow could determine who will dominate. If Amazon is really serious about winning in the Netherlands, let’s see which grocery platform they acquire. Or launch, for that matter…”
Trustpilot ratings show that amazon.com, amazon.co.uk and amazon.de have TrustScores of 2.5, 2.4 and 2 out of 5 respectively. Bol.com comes in with 3.7, while Coolblue boasts a score of 4.7 out of 5. Dutch consumers have come to expect a certain level of customer service. Do you think that Amazon’s (perceived) issues with customer service may be a hurdle in the Netherlands?
JWR: “According to Gartner, 2020 is the year that customer experience will take over price and product as the key brand differentiator. 89% of businesses expect to compete mainly on customer experience. Coolblue is leading the way in NL and BE as they really own the experience end-to-end (including a share of delivery with their own vans), which is different compared to other platforms/marketplaces. That’s why we’ve recently seen the trend of Direct to Consumer (D2C). Brands invest heavily in marketing and branding, and do not want this effort to be diluted by a retailer or platform that does not offer, at the bare minimum, the same experience. Competition is fierce, you cannot afford to lose a customer due to a bad experience because in this highly competitive and crowded market, they simply will not come back.
But on the other hand, how important is the Netherlands for Amazon, really? The market will be expensive to win, it will take time, and the upside is minimal when compared with other bigger e-commerce markets. On Singles Day alone, Alibaba processes as much as the entire yearly e-commerce turnover of the Netherlands.
Maybe, just maybe, Amazon has bigger fish to fry…”
Founded in 2009 in the Netherlands, Paazl is a fast-growing SaaS company that focuses on making e-commerce delivery convenient. We built a data-driven algorithm based on real-time carrier data from over 50 international and local carriers. It benefits e-commerce brands and retailers by optimising cross-border logistics and personalising delivery options. This allows them to visualise time and locations in the checkout page so their consumers can pick when and where they want their items to be delivered. Paazl handles over 20 million shipments yearly, around the globe. Paazl partners include G-Star RAW, Under Armour, Rituals, and Hunkemöller.
Does your brand already offer the best delivery experience? Click here to find out more…
*Based on 2019 Profitero study.