SAG_Twitter_Amazonization_Jan17.jpgThis year there will be further “Amazonization” of retail as many new market entrants - as well as existing retailers - find new ways to sell, fulfill and deliver products to demanding consumers.

The term Amazonization reflects new market entrants striving to sell and deliver their products by imitating or beating Amazon. The bar is high; Amazon pioneered online ordering, as well as the one-click checkout, and is currently writing the book on space-age fulfilment

But, said a Google/Ipsos study, 50% of consumers are willing to try new retailers - so new entrants should have an eager audience. So how can they compete?

The National Retail Federation said: “Until they’re willing to make steep investments in research and development, conquering the online behemoth is an unrealistic goal. Energy is better spent on cultivating the brand and being sure it means something to targeted consumers.”

One recent example of a new entrant is “The Chapar” – a site targeted at men who don’t like going shopping. The Chapar has an online registration then uses personal style advisors to select wardrobe items for men, and puts together a personalized trunk of clothes which will be sent. Customers can choose the clothes they want to keep and send the rest back for free via a courier.

Existing brick and mortar retailers had a grim 2016 for the most part, but many have got plans of their own for Amazonization.  Staples made inroads into on-demand ordering by using artificial intelligence. Staples Easy System allows customers to order anytime, anywhere, from any device they prefer, including by text message and through the Staples app.

Nordstrom bought a stake in a supply chain software company, launched its first chatbot and added new capabilities to its mobile app.

Technology is key to both new and existing retailers which are offering new ways to sell and fulfil.

Tim Denison, Director of Retail Intelligence at Ipsos Retail Performance, told CSuite: “Technological innovation is now a core strand of business strategy in the retailer’s books [however], it comes at cost, as not all new technologies are winners.”

Smaller or newer retailers may have a mountain to climb in tackling Amazon, but they are in with a chance if they focus on targeting niche markets, are obsessive about customer service and offer free, lightning fast, where-they-want-it delivery. 

The Amazonization journey requires retailers to be able to orchestrate and automate seamless processes, across the many different systems involved, while being able to provide real-time interpretation across multiple data sources and respond appropriately. Only then can there be more tribes entering Amazonization in 2017.


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