One of the speakers at this month’s NAHAD Annual Meeting & Convention in Las Vegas was Denise Keating of DATAgility, who spoke about “The Amazon Effect” that many companies, from manufacturers to distributors have been experiencing. Is it possible for a company to keep its sales channels intact without being overcome by the multibillion-dollar behemoth from Seattle?
Keating warned attendees that Amazon is not going away. In fact, the company’s incredible growth shows no signs of slowing down. In the last two years, Amazon has had 30% growth — a number that’s hard to fathom for a company of its size. Plus, while the company has been focusing more on the b2c market, the b2b market is five times larger, meaning that Amazon executives surely have a lot of the industrial in their targets.
Here are some of her main takeaways:
- Often times, innovation is about taking an existing product (or sometimes a newer product or service) and making it better, faster, and cheaper. It’s about making incremental improvements in your business processes, as well as in your manufacturing and distribution processes.
- When she recently surveyed 300 manufacturers and distributors across multiple verticals, two-thirds felt that Amazon was some level of threat to their business. But she feels that the threat by another company or threat of disruption really comes not from what the other company is doing, but by our own lack of action and our own lack of understanding of the customer.
- Customers have come to expect an easy-to-use platform with a broad selection of products, with robust and trusted content — all to help them make informed buying decisions. They want to be treated as an individual, so that they receive a personal and consistent experience. And Amazon has taught buyers to become dependent on fast, reliable, on-time, low-cost or no-cost shipping. You don’t want to ignore those changing expectations.
- Virtually all Americans own a smartphone — and the use of the smartphone runs across all demographics, so a mobile app can be an important tool. She explained how Home Depot ended up creating two totally different apps for typical consumers and their pro customers, because they saw enough differences in their needs and their behavior. Keating said that when you’re building either your app or your website, take multiple perspectives into account — say, both loyal customers who are familiar with you, as well as customers who are totally new to your company.
- Include technical specifications on your site to help your buyers make informed decisions. Let them do faceted search on physical performances and attributes. Provide all of the content that supports the customer — not just in text form but with images. Create a visual representation of that information, as that really resonates with many customers. Amazon doesn’t focus on the post-sales support sites based on products, so make sure to also include details such as warranties. Maybe you offer 30-, 60-, and 90-day, as well as 1-, 5-, and 10-year warranties. All of that information might be important to the customer; don’t limit their ability to filter the products on your website by that sort of information.
- Don’t forget to include all delivery options on your website. Let customers know how what products are available for same-day shipment and whether you have the inventory available.