The daily dose of headlines generating from the world of Amazon underscores one notion—its grip on the retail industry and brands alike continues to tighten. The Jeff Bezos-led powerhouse is forcing executives to rethink strategies for delivering experiences and unique value propositions to consumers in order to remain prosperous in Amazon-dominated times, a quartet of industry experts told AListDaily in separate interviews.
Lokesh Ohri, a principal at Deloitte emphasizing in omnichannel retail, digital and supply chain strategy, says that if you’re a commodity brand, then you need to reevaluate your plan and build a strategy around a product, category or offering that Amazon cannot meet.
“Amazon is basically trying to become the one-stop-shop for everyone and remove brand value,” said Ohri. “They’re trying to disintegrate into different areas by saying ‘the brand is separate from the product.’ Relevance is a very big aspect of that.”
Building brand loyalty among consumers is one way marketers can make sure they have more than a mere puncher’s chance. Brand marketing strategy shifts include everything from experiential retail pop-up shops to introducing artificial intelligence, virtual reality, augmented reality and Internet of Things in order to enhance the shopping journey and further harvest customer loyalty. Ohri called this the “omnireality” and sees it as part of growing trend to further fend off Amazon.
“How you really connect with consumers, both as brands and retailers, in an omnireality world is the next question that marketers need to start answering,” Ohri said. “Start thinking, preparing and integrating for that world a little bit more, not just waiting to see who’s going to do it next.”
“I don’t think we want to see a whole bunch of copycats,” he said. “We certainly want brands to think more about the value they drive to their customers, rather than trying to think about ‘how do I compete with Amazon?’”
Klein said that although Amazon will always have a relevant piece of the overall pie, building experiences that resonate with consumers will help build brand equity that can otherwise be lost.
“I think it’s really about being true to the brand promise of having integrity with the brand that marketers put forth,” Klein said. “At the end of the day, with all things being equal—price, location—experience is going to be the differentiator. Drive a different experience that solves a problem.
In their quest to take on Nike, Reebok and Adidas, Under Armour has also felt a reverberation, reporting its first year-on-year fall in revenue last month. When asked of the e-commerce effect Amazon is forcing on its brand, Sid Jatia, vice president of omnichannel digital at Under Armour, said the company is focusing on content and experiences ranging from exclusive drops to shoes and studio collections.
“We’re excited about what Amazon is doing in the retail innovation space, as they’re a strategic partner of ours. However, our team in the direct channel is focused on creating a more elevated experience, perhaps the best the brand can offer across touchpoints,” said Jatia.
Under Armour’s customers come back to UA’s channels because it offers content that portrays the brand in a way that is relatable, Jatia said.
“We have an extensive product line and unique storytelling capabilities that differentiate us from retail channels like Amazon,” Jatia said. “At the end of the day, it’s about personalized experiences, extensive product choices, deeper content and elevated conversation being the reward for shopping in the direct UA channel.”
Although Amazon seemingly has an endless disposal of data to craft and build its own experiences, retailers can still remain competitive by building ecosystems, Ohri added.
“Because Amazon still has a captive market, integrate with social media platforms and use the data you have to make sure that you’re targeting the right customer bases for your products,” Ohri said. “If you think about social platforms, you have a much larger reach than just Amazon.”
Peter Wharton, IBM’s worldwide product marketing lead for commerce and optimization, spends his time defining go-to-market for omnichannel experiences and competing with Amazon from a platform and cloud perspective.
He said that if brands want to shift the competitive balance a little back into their favor, they need to avoid using Amazon’s services altogether.
“There’s an opportunity for retailers to look at how they can take advantage of what happens in the marketplace, as well as what happens on their websites,” said Wharton. “Retailers compete with Amazon, but they [might] also use the Amazon cloud to manage their commerce environments. If you’re using the Amazon Web Services platform, you need to desperately get off of it because all you’re doing is funding the competitor.”
“Amazon has even more information now about customers because brands are going through the Amazon platform,” added Klein, meaning that if you’re a marketer hell-bent on battling Amazon to build brand loyalty and drive experiences, your best bet might be to avoid building voice command functions for Amazon Alexa and Echo.
“Brands will need to clearly define their value proposition and engage their customers in a way that they know will stay relevant,” Ohri said. “As a retailer, you cannot try to become Amazon, but there’s absolutely a space for retailers, too—they need to start crafting it slightly differently. It’s a different game that Amazon’s playing.”