Commentary

How Ecommerce Startups Can Thrive In The Era of Amazon

“We need a strategy to compete with Amazon.”

“Amazon is killing us.”

Amazon is a favorite topic of discussion among retailers, when it comes to how and to what extent any retailer can compete with it (if in fact they can).  

Is it possible to find a win against the behemoth? A workaround?  

By looking at this conversation strictly in terms of winners and losers, I think we’re missing an opportunity to recognize Amazon for the collaborator and partner it can be to ecommerce companies.

Amazon remains an online shopping go-to for consumers . As of the middle of last year, Amazon’s share of the e-commerce market was roughly 49% of all online retail spend, according to eMarketer.  Goldman Sachs reported Amazon to be a top destination for online shoppers, especially millennial men, who rank the site as their “favorite place to shop” in nearly every category. Close to two-thirds of Americans report that they bought something on Amazon, according to an NPR/Marist poll.

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What does that mean for retailers? In short, the ever-growing, efficient platform that conveniently and effortlessly brings audiences to products cannot be ignored. (Remember the companies that said they didn’t need to embrace search when it first showed up on the scene?).

I don’t just mean that retailers should take note of Amazon in their peripheral vision. Quite the contrary. Consumer companies should embrace Amazon in their early-stage development. An Amazon strategy is a critical part of an omnichannel experience and I expect we’ll continue to see more growing retail companies figure this out.

What is it about Amazon that should make it a platform of choice, especially at the growing stages of company creation?  To start with, it can help to enhance distribution through a built in logistics channel. From a user perspective, it provides a forum for feedback, customer reviews and communications.

Does this come at the expense of a direct customer relationship? Just ask Nike — or Casper, or other iconic consumer brands that are setting up shop on Amazon as a strategy that runs alongside their direct-to-consumer relationship. If anything, a presence on the largest e-commerce platform strengthens brand equity, by creating multiple impression points.

And then there’s Amazon’s search function, an acquisition funnel. More than 50% of retail customers begin their search not on Google, but on Amazon, according to a Kenshoo survey. If done right, visibility on the platform can be a direct line back to your website as customers seek out more product information and details.

As 2019 brings continued retail transition, one thing's for sure: The savviest e-commerce brands will not fight against Amazon, but embrace it for the powerful partner it could be.

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