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.”

Comments

5 comments

  1. Sara Hent posted on April 29, 2017

    Back to basic for business in Australia and a brilliant piece by Edward thanks. Brand wins the day, price will not. I'm sticking with the businesses that look after me! reply

  2. Warren Ray posted on April 30, 2017

    Mr Harvey can go to hell. 3 years ago I had the disgusting displeasure of dealing with Harvey Norman. What should have been a simple transaction - I bought a TV - turned into a nightmare. Poor follow up, bad communication, overall an experience so infuriating that to this retailer I have said - NEVER AGAIN. So Mr Harvey can stick it. I hope Amazon obliterates your business. reply

    • Jennifer Kenyns posted on May 1, 2017

      Warren you are a disgrace. A short sighted DISGRACEFUL person. Who is with me?! Gerry Harvey has contributed millions to the Australian economy, created thousands of jobs. Crying poor over your TV set and currying favour for an American company which will cut jobs, and contribute LITTLE to the Australian economy. I'm with Gerry. reply

  3. Alex Beeston posted on May 1, 2017

    I have little sympathy for Harvey Norman. Actually, no sympathy! An old retailer with old ideas. Too slow to catch up to digital and NOW complaining! Good luck Amazon. reply

  4. Eric J posted on May 2, 2017

    At the heart of this, and ignoring the STUPID comments from Warren, is the customer. Give the customer what they want. Solve a problem. Give a customer a positive result. Do this. You win, simple. I'm in retail. If you're not focused on bricks and clicks, you don't deserve to survive. The internet is not a new thing. It's not a fad. So anyone, like Harvey, who hasn't embraced this has created their own problems. reply

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