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How brand, not price, will win the Amazon war

Amazon5Amazon’s much awaited arrival in Australia catapulted retailers to prepare themselves for a possible industry shake up. The online marketplace last week confirmed plans to ramp up its retail offering Down Under.

Aussies are anticipating Amazon Fresh’s arrival this year, competing with local supermarkets such as Woolworths and Coles.

“For consumers, extra competition will translate to cost savings and improvements in shopping convenience. Consumers win, but some retailers will lose,” said senior marketing expert Edward Crossin.

For most retailers, the American giant’s arrival is daunting. Woolworths and Coles are increasing their resources around data science and loyalty programs. Through a customer focussed strategy, the programs aim to increase engagement, improve loyalty and drive higher sales. Most retailers don’t have the power of Woolworths, but it’s not about resources for Crossin.

“The focus should be less on competing, and instead on being more human and more remarkable,” the marketing expert explained.

Retail in Australia is full of success stories of brands that have thrived through creating a point of difference.

“What’s the common theme of Australian retailers like Nourished Life, Vinomofo, Huxtaburger and Gelato Messina? They differentiated themselves in an established market and product category. Through creating a difference that resonated with customers, they are winning,” Crossin added.

The marketing expert said Harvey Norman has been slow to embrace the digital era and are in “catch up mode”. “Gerry Harvey has publicly declared a price war on Amazon. But price is a race to the bottom. Instead, humanity, personalisation and being different is a race to the top,” he said.

With many retail experts predicting Amazon to win the battle, the marketing expert also said creating an emotional connection with customers was key.

“Getting the digital plumbing is vital for retail relevancy. But retail brands must not lose sight of their brand and the history of customers who are connected with that brand,” he said.

“Branding is a trust mark. The currency of trust is a value that never diminishes. David can take on Goliath with their own brand advantage. Consumers crave the unique, the human and the remarkable. Amazon doesn’t have that connection, and there lies the opportunity.”

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