To Amazon or not to Amazon – that is the question for many retailers. With the retail giant’s third quarter results showing profits triple and a 37 per cent increase in earnings, other retailers are understandably concerned.

Do they use Amazon to sell their products (knowing they will have to play by Amazon’s rules) or get set to up their game?

Amazon has an estimated 38 per cent share of the US e-commerce market, and more product searches start on Amazon than on any other search engine.

Assessing the pros and cons of getting into bed with Amazon has never been more important. The current environment means supply and demand often trumps customer experience but as we all know the only constant when it comes to e-business. How can brands best navigate a world of commerce giants?

The data playoff

When brands sell on Amazon they give away access to customer data that can be integral to personalisation, customer service, product development and so much more. It’s no surprise that Amazon is very good at leveraging this data into targeted marketing and building out their own, rich consumer profiles. Critically, brands lose out on having this for themselves – so while Amazon gets richer in terms of data the brand themselves can become data poor.

With data streams diverted to Amazon, relationship marketers find themselves on the sidelines. Their customers are increasingly becoming ‘indirect customers’ whose buying habits exist behind a veil of mystery. But brands are still under pressure to serve personalised customer experiences and consumer-first marketing, no matter where their customers choose to make their purchases.

To address this it’s critical that brands focus on developing direct relationships with customers however they buy. Start by integrating the data you have, building out mailing lists, speaking directly to your customers and using events and giveaways to nurture these relationships.

Social media and other owned channels are a goldmine – they can foster relationships and serve up entertaining, inspirational and educational content. Critically they also feed into social listening – allowing brands to truly understand and cater to what their customers want and need. This is particularly useful as COVID restrictions continue to change and influence the way we shop and interact with brands.

Nurturing customers

Owned properties are more fun and offer far more storytelling power than a standardised Amazon product page. With that in mind, while Amazon corners half of the e-commerce market, the main drivers are more transactional than emotional in nature: customers mostly choose Amazon because of free shipping (70 per cent), price (65 per cent), and two-day or next-day shipping (60 per cent) according to Epsilon. Ultimately, an unforgettable customer experience is hard to ship in a cardboard box.

This leaves a major opportunity for brands to dazzle consumers with engaging stories on their owned platforms. And then use the opportunity to ask for actionable data points in honest, transparent language – perhaps while throwing in a few freebies because data is currency these days.

Personalisation matters

Behind the scenes, Amazon’s online ecosystem not only captures gazillions of data points, it also puts owned customer data to work as a major part of its business model. Using advanced AI functionality, Amazon creates more than 35 percent of its total revenues with personalised shopping recommendations.

Marketers should take this fact as inspiration rather than discouragement. Because first of all, the AI-powered tech that helps Amazon know exactly which item customers want to purchase next is becoming accessible to all brands, for instance through the Selligent Cortex engine. And second, with the right marketing software, marketers can create some degree of marketing personalisation from very little data, even for anonymous website visitors.

But in order to drive relevant, consumer-first marketing, marketers really need to obtain as much data as possible about their indirect consumers. Even if purchases happen elsewhere, your owned customer data is your most valuable resource in staying close to your customers in the future.

Amazon as the Trojan Horse

To mix metaphors, retailers could start to reframe the relationship from David and Goliath to using Amazon as a trojan hose for building a relationship with customers. Rather than trying to beat Amazon at its own game (which looks unlikely), smaller retailers could consider using it to sell and then ensure they find a way to get customer directly into their own CRM post purchase. This could be via direct promo codes on the box or discount coupons inside – critically to be redeemed on the retailer’s own website, not via Amazon.

For customers, it’s win-win – an easy, quick and known first-time experience, followed by a discount on a subsequent purchase. And for retailers, repeat custom and data that can be used for personalised offers in the future.

Whether you take a leap with, or without Amazon is for every brand to decide on its own – but you’ll need to be intentional and analyse whether an exit or a dual strategy makes more sense. Whether or not you choose to play in Amazon’s world, the future belongs to brands who can build meaningful relationships with their consumers based on trust and relevance.

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