There's no doubt anymore about whether Amazon is coming to Australia. It's coming. And yes, retailers should be worried – Amazon brings with it phenomenal purchasing power, cutting edge technology, and the ability to sell and deliver just about any product to all Australians, cheaper and potentially faster than anyone.
How can small retailers compete with that?
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Amazon is coming to Australia
The US online retail behemoth confirms it will establish the first of many fulfillment centres in Australia, in a move that's sure to disrupt the local market.
Simply put, we can't. But while Amazon will undoubtedly provide a greater cost-benefit to the Australian consumer, small businesses have something to offer that the retail behemoth cannot; true personalisation.
Of course, Amazon aims to be a customer-centric company, but its personalisation is based on software and algorithms. Can sophisticated software really compete with a small business owner who genuinely knows their customers?
We don't think so. Savvy shoppers know the difference between a product suggestion based on previous purchases and a true connection with a business owner.
According to Deloitte's 2015 Consumer Review, personalisation is more important than ever before. In fact, the majority of customers are willing to pay more for a customised product or service and almost half are willing to wait longer for that customised product or service. So, while price and speed will always be important to consumers, if we as small businesses can't compete with Amazon on price or delivery, then we must compete on personalisation.
It's our belief that as the need for personalisation grows, a consumer hunger will develop for niche marketplaces, micro-brands and tailored experiences; a trend that will allow smaller retailers to flourish as they set themselves apart by offering one-of-a-kind services and experiences.
Small businesses ultimately need to embrace the fact that customer experiences are becoming more important than ever, and tailor their strategies accordingly. Whether it's one-off gifts, handwritten thank you notes, shout-outs on social media or personalised shopping experiences, small businesses have the advantage of being able to develop a much more intimate relationship with their customers; a genuine relationship that doesn't rely on data gleaned from technology.
That's not to say we should avoid personalisation or CRM software altogether – it would be impossible to grow your businesses without implementing this kind of technology. But small businesses – particularly very niche and micro businesses – have the ability to really get to know our customers. And that's what sets us apart from the retail giants.
So, if you're a small retailer worried about what impact Amazon's arrival will have on your business, ask yourself how well you know your customers. And if you don't know them well, start. Start learning your customers' names. Start learning about what they like and maybe send a few of them a one-off gift to thank them for their support. Find them on social media and say hi. Be present, start engaging, and you'll be surprised by how the smallest amount of genuine, personalised interaction will make your customers feel valued. And in the long term, this will result in a loyal customer base who's less likely to be tempted away by discounted prices and speedy delivery.
Chris Tantchev is the co-founder of personalised book subscription service Bookabuy.
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