Amazon vs consumer brands. How to face the elephant in the room.

Paazl
By Paazl
February 13, 2019

When we look at the statistics surrounding Amazon they really are quite frightening. The market share that this elephant holds is staggering. We’re talking 49.1% of online sales in the United States, 33.5% of sales in the United Kingdom and we could go on.

In the Netherlands we seem to have avoided Amazon taking over our online market. After all the Dutch website sells e-books and not much else. However, Amazon currently conducts all its Dutch operations through Germany, and the fact is that with very little effort they managed a turnover of 250 million euros in 2017. That made them the sixth largest webshop that year. So it is clear that there will be some serious market disruption when they finally do spread their tentacles here.

Despite the immanent threat of Amazon, online brands are still managing to trade successfully via their own channels. To ensure this continues into the future we recommend brands invest in their own online stores. After all, it is about getting the right balance between generating sales via Amazon, in addition to via your brand channels. Let’s delve a little deeper.

Why is Amazon so successful?

Amazon as well as other e-commerce giants such as Zalando and Bol.com lead they way when it comes to convenient online shopping. They make the process of buying an item online simple, and this goes right down to payment options, stock levels and delivery. Let’s explore three of the ways they make shopping online convenient for the customer.

Payment options

The preferred payment method depends on the market. In the Netherlands iDEAL is the most common and most preferred payment method. In the United Kingdom it is debit and credit cards, in Germany it is ‘pay by invoice’ and so on.

E-commerce giants such as Amazon and Bol.com will ensure that they have the preferred payment option for the market to make the payment process as easy as it can be.

Stock levels

Online shoppers want to know stock levels. They want to know if they need to make the purchase immediately, or if they have time to mull it over a little bit more.

Because of this consumer want, some online merchants – particularly the e-commerce giants – are displaying stock levels on the product page.

Delivery

You knew it was coming right? E-commerce giants such as Amazon and Bol.com have really nailed delivery.

Gone are the days when consumers stay at home all day waiting for their items to arrive. Or for their items to be delivered when they are at work so they have to chase after the package for a week.

E-commerce giants provide a delivery service which fits around the lives of their customers. They also tell their customer exactly when the delivery will take place. They have truly set the bar high for something which is hard to get right.

Selling via Amazon vs through your own channels

The way for consumer brands to thrive in a world of e-commerce elephants is to balance selling via these channels and via their own channels.

Selling items via a third-party platform such as Amazon is an undeniable sales strategy which ensure turnover and brand awareness.

However, brands should not forget that when they are on Amazon’s digital shelves they are competing with Amazon’s own-branded products. Since the e-commerce giant controls the search algorithms, they will try and sell their own products first as these come with higher margins.

Therefore consumer brands should not rely entirely on third-party e-commerce giants for all their revenue.

Brands should ensure that they are also attracting customers to shop via their own channels. So, how can you do that? By ensuring that your service is just as inviting and customer-friendly.

How to provide the same service as Amazon

The good news for brands who want to invest in their direct to consumer strategy is that they have all the resources to match the convenience of e-commerce giants at their disposal.

How to offer the preferred payment method

Take payment solutions as an example. Amazon and the like excel in offering the most convenient payment options for the market they are delivering to.

For brands to match this offering they only need to turn to a payment platform such as Klarna or Worldpay. Through one contract they have access to multiple international payment options. so can offer the preferred method of the country they are selling to.

How to offer a convenient delivery service

For delivery, there’s Paazl. We connect e-commerce brands with the world’s delivery carriers.

With one connection we calculate personalised delivery options for every order from national, international and local inner-city delivery carriers. From on-demand delivery to nominated day delivery to pick-up points. Your customers can pick and choose the option that suits them.

Our software also includes solutions for delivery information and track and trace in the front-end of your website. Along with label generation in the back-end and delivery analytics.

Take a look at our Checkout Widget blog post or contact one of our delivery experts for more information on how you can provide a delivery experience to rival Amazon’s.

Conclusion

Ultimately consumers will vote with their wallets. Whether they decide to come to you directly or purchase your items via a third-party platform will depend on the level of convenience on offer. But as long as you maintain a balance of direct to consumer and third-party sales you can’t go too wrong in a digital world of elephants.

More inspiration.