How SMEs Can Use eCommerce Marketing to Their Advantage

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How SMEs Can Use eCommerce Marketing to Their Advantage

It’s been more than three years since Amazon landed in Australia. How has the retail giant changed the ecommerce landscape down under and what effect has it had on local businesses? 

Amazon in Australia

  • Amazon Australia counted more than 2,000 third-party sellers within 24 hours of going live, a number that grew to 5,000 just a month later, with 55 new sellers joining each day on average (xsellco.com)
  • Revenues skyrocketed to $292,3 million in 2018, up 1500% from $17.3 million the year prior (xsellco.com)
  • There were more than 125 million products across 30 categories listed on the Australian site in 2019 compared to less than 100 million products and  23 categories during its launch in December 2017 (marketingmag.com.au)
  • Amazon Australia ecommerce sales are expected to breach the $23 billion mark within the next 10 years (afr.com)

 

What exactly is the Amazon Effect?

The Amazon Effect varies with each industry being cited. Generally speaking, it describes the phenomenon in which smaller stores, particularly bricks-and-mortars, lose customers and face great difficulty when competing with the world’s largest online retailer.

Amazon’s near-limitless selection,  low prices, fast shipping and free returns set high customer expectations that smaller local retailers are unable to match. 

Even local retail giants are not safe from the Amazon Effect. Many have bolstered their online strategies in order to combat any potential market threats. 

Coles and Woolworths notably started offering free same-day delivery to shoppers who spend more than $150 to $300 while JB Hi-Fi , Myer and Harvey Norman have also  introduced “click and collect” options to make the shopping experience more convenient. 

The Amazon Effect and Australian SMEs

What has been Amazon Australia's impact on consumers?

  • 98% of Austrailian online shoppers know about Amazon Australia while 78% have visited the website (au.finance.yahoo.com)
  • 42% think the site offers unique products not easily found anywhere else (au.finance.yahoo.com)
  • Amazon.com.au monthly site visits increased 49.5% between February and July 2020 (practicology.com)

But it seems that the threat to local retailers is more perceived than real based on surveys:

In fact, Amazon Australia seems to be more of an opportunity rather than a threat for SMEs:

  • According to a BigCommerce survey, 3 in 10 consumers discovered a brand on Amazon before making a purchase on the brand’s own website.  Having a presence in Amazon can introduce your brand to a larger audience, making it a great marketing platform for your business.
  • 22% visited a brand’s official site before buying that brand’s products on Amazon. 
  • According to the Amazon 2018 Small Business (SMB) Impact Report, 50% of products purchased from their marketplace  come from third-party sellers. In 2019, over 20,000 of their third-party sellers generated more than $1 million in sales revenue.

What Australian SMEs Can Learn From Amazon

Perhaps the most important thing Australian SMEs can learn from Amazon is the platform’s customer-centric approach to ecommerce. Their business innovation is driven by people’s needs and buoyed by technology’s potential.  

In fact, one of Amazon’s Leadership Principles is Customer Obsession – leaders should always start with the customer and work their way backwards to maintain trust. They pay attention to competitors but they obsess over customers.

The retail giant optimises business process or workflow around its customers. Australian SMEs don’t need to offer nearly as much inventory or low markdowns as Amazon – they can simply pivot their business strategies to revolve more around the customer.

Shoppers no longer consider price to be the main factor in their decision to buy on Amazon over another online retailer. 28% cite convenience is the key factor. (smallbiztrends.com)

Enhancing customer experience as the most crucial determining factor in overall business success. After all, disruption is less about toppling industry incumbents and more about offering a new product or service that provides a solution to customer’s most pressing problems and needs. 

One way to incorporate a customer-centric approach to your digital strategy is to use personalised ecommerce marketing.

What is eCommerce Personalisation?

Ecommerce personalisation takes a proactive approach towards creating personalised  experiences and interactions on ecommerce sites. It si done by deliberately showing customers specific content and product recommendations based on their behaviour, demographics, and so on.

  • Close to 50% of shoppers are willing to spend more money on a brand that provides a personalised ecommerce experience (itproportal.com)
  • 94% of marketers say that personalisation is important to success though nearly three-quarters of them struggle to implement effective real-time, personalised content (coredna.com)
  • Personalising the ecommerce experience increases sales by 7.8% over a short period with online retailers reporting a 19% average sales increase across the board   (coredna.com)

Amazon’s ecommerce activities include the use of AI ecommerce tools like algorithms to test copy, detect marketplace trends and upsell via customised recommendations. SMEs can harness similar AI tools for personalised ecommerce, including the use of chatbots to provide quick and reliable customer support. 

How SMEs can Use eCommerce Personalisation 

  • Address customers by name – Amazon uses personal references in direct communications with consumers. SMEs can address consumers by their first name in emails or on the home page to make them feel that the shopping experience will be tailored to their preferences. Referencing consumers’ names can be easily done in any ecommerce site that encourages shoppers to create an account. 
  • Make product recommendations based on browsing history – Amazon takes every opportunity to recommend other products during shopping experience. They make personalised recommendations based on previous browsing history and online behaviours as well as shopping data from similar consumers to make sure that these are products that the shopper has already shown interest in. They are able do this without interfering with the shopping experience. 
  • Use intelligent search –  Amazon’s intelligent search function predicts which products shoppers are looking for as soon as they start typing in the search bar, making product name suggestions based on AI algorithms and data on previous shopping behaviour. These suggestions become more accurate with each letter. This increases the chances of the shopper finding what they need and making a purchase without having to leave your site. It can also make them feel as if your business is responsive to their needs. 

Other Ways SMEs can Survive the Amazon Effect

  • Optimise for mobile – Make sure your product pages are updated and that the checkout process is seamless. 25% of Australian online sales in 2019 were made via mobile while 48% of consumers shop on their mobiles at least once a week (marketingmag.com.au)
  • Send cart reminders – Consumers using mobile or public wifi to shop while on the move face many disruptions that can cause them abandon their carts. Sending them a cart reminder or their most recent browsing history can help them complete their purchase. 
  • Provide tailored service online and offline – The kind of personable service you provide customers is something that no search bar or chatbot can replicate. 

Work with a Digital Agency Today

SMEs can take a few pages from Amazon’s book when it comes to Customer Obsession, convenience and personalised ecommerce. Taking a customer-centric approach to sales and marketing can help SMEs provide a similar level of service and personalisation. Many of the AI tools Amazon utilises for personalised ecommerce are accessible to SMEs.

Contevo can help you personalise the ecommerce experience. We’re a Shopify Partner with more than 15 years’ experience. We’re passionate about helping Australian businesses refine their ecommerce marketing strategies. Give us a call if you’d like a consultation.  

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