In the past decade, Amazon pulled the rug out from under traditional brick-and-mortar companies. Now, Amazon continues to grow--taking a big piece of the e-commerce pie--while other major brands are grappling with the threat of bankruptcy and profit loss.
Traditional players are struggling to stay relevant and meet their bottom line as they compete with Amazon. But, agile and savvy online businesses are finding massive success taking advantage of new ways to sell and interact with customers.
So, how did Amazon impact the way companies interact with consumers? And, how can an online business find success in Amazon's world? Here are a few key trends that business owners can leverage for themselves.
Ditch the old models--they no longer serve you.
There's no question that Amazon is impacting most aspects of selling. If you take a closer look, however, you'll notice that not all companies are experiencing a decline. In fact, there's a trend among the companies that are struggling, including those that have filed for bankruptcy, like Toys R Us and Radio Shack.
They're channel sellers: companies that sell a selection of products manufactured by other brands. With more than 500 million stock keeping units (SKU), product identification codes, Amazon has taken much of the channel sales business for itself.
Before Amazon and e-commerce, consumers would go to a grocery store to get food items, then a convenience store for things like toothpaste, and then a clothing store for basics like socks. Now, they can buy all of these items at affordable prices in one place: Amazon.
Embrace the new direct-to-consumer model.
While Amazon has made traditional channel selling obsolete, it has also created opportunities for nimble, direct-to-consumer companies. These companies are successful because they're able to differentiate themselves from Amazon. If you're looking for a specific product, you can find it on Amazon pretty easily. When you want something unique, maybe for a gift, Amazon isn't the best option. You might pore over pages of products and feel overwhelmed or dissatisfied by the choices.
Instead, you can buy from a direct-to-consumer company that specializes in niche items with a personalized, curated buying experience. These companies are able to build authentic relationships with their customers in ways that weren't possible before the Internet. That's in part because there are now many ways to connect directly with a customer online, including social media, a website, and online forums like Quora or Medium.
Bikini Luxe, for example, sells designer swimwear online and uses unique social media tactics to engage with its audience. The company isn't afraid to take risks, posting a picture of Miss Universe contestant Natalie Roser in a bikini on LinkedIn with the caption, "Is this appropriate for LinkedIn?" The controversial post garnered 50,000 views and boosted sales by 20 percent.
These companies typically have smaller teams with low overhead, unique merchandise, and successful customer acquisition tactics. Many of these brands are generating over $10 million in sales each by using e-commerce platforms and social networks to keep expenses to a minimum.
Quickly iterate with customer feedback.
If customers had product feedback after purchasing from a channel seller, their complaint or suggestion wouldn't get very far. The teams building the products aren't regularly talking to the sales employees or their end customers.
Direct-to-consumer brands are able to engage with customers one-on-one, and then make sure the feedback gets to the right person. They're also able to change the product much faster if there is a problem.
Adapt to new ways of buying.
Consumers are increasingly buying more goods online. Statistia predicts there will be 2.14 billion digital buyers globally by 2021. And according to Nielsen, seven in ten Internet users trust the brand website and consumer opinions over traditional forms of marketing and advertising.
These smaller brands are better able to take advantage of selling via social media, mobile, etc. For example, in general, consumers typically wouldn't follow a channel seller like Amazon on Instagram, because there's no emotional connection to their products. But, many follow niche businesses on Instagram, because their products and engagement have greater emotional appeal for the consumer.
Direct-to-consumer brands typically have less bureaucracy to deal with, so they can quickly adapt to consumer trends. We're seeing savvy brands move from one selling technique to the next until they find success. Traditional, larger teams with more red tape aren't able to make those kinds of decisions quickly, and end up losing money from either outdated tactics or slow-to-market approaches.
There's no denying that Amazon is impacting the retail industry. But, it is also a great time to own an e-commerce business. Savvy, niche online sellers can be successful by taking advantage of this new retail landscape.