Everyone thinks that amazon is taking advantage of the moment to sell more and improve its profits. It’s true, as a company better positioned in online sales, with no physical stores to close (it only has a few, which it uses as testing), it can be seen as the great beneficiary of the pandemic and the closure of everything else. It is the only one that sells certain products that physical stores and department stores are forbidden to buy in almost all countries. His workers are allowed to move around and he is hiring more staff. In other words, it is the perfect storm for a business.
But maybe we need to do another reading.
It turns out that large and small businesses had stopped fighting the Amazon giant. Some for understanding Amazon allows others to sell through it. You use it as a broker, it sells you and takes a cut. You save on logistics, user management, … come on you don’t have to think too much. That’s despite the fact that you can’t control users and their opinions, that Amazon knows as much or more about who is buying from you and why (being able to and in many cases doing so as a competitor of yours in the medium term).
A few months ago Nike decided not to sell with Amazon, and a few days ago it turned out to be the best valued brand in the world. I think that syllogism speaks for itself. That strategic decision, for some a bit absurd, a priori, because if you have a big brand the damage of corporate identity impersonation is more difficult, the competition within the marketplace is small, that is, it seems that the only thing Amazon brings is more sales. But feeding a monster does harm in the long run. The business paradigm: the good in the short term is the enemy of the good in the long term. That’s why, and much more, Nike decided to leave Amazon and go it alone.
So, if a big brand makes that decision, we won’t have to think otherwise?
Online business is not easy
Selling online is not easy and it’s getting more complicated. It seems a sentence of useless logic, but selling online is a very complex strategy. It’s not about having an online store, doing SEO, SEM, managing social networks, and come on, sell… No, it’s complex, and we’re going to analyze it here:
There are new players
Great marketplaces that sell to everyone and from everyone. They offer their services to help you sell, but you help no one buys from you, except there…
You need an online store and reference. That means looking at the long term. In the same way that you would buy or rent a shop in the city centre, and little by little with effort and investment you would make a place for yourself. Selling with an online store is not something that takes months but years. Many have taken the strategy or the fashion of becoming an online store and believe that if they invest 500 euros a month, they should get less than 500 euros profit a month, in less than 1 year. The online business is a business in itself, which can offer an additional sales channel, improve brand image, boost the sale of products that we do not have in store, … But it is not creating today, sell tomorrow. Whoever thinks that is so, do not try.
Selling online, only online is not for the faint-hearted. You have to invest, analyze and fight. If with an online store, 100 euros in marketing we think about selling thousands of euros we are wrong. We must be aware of various options, sell in marketplace, in a controlled manner, analyzing data. Invest in my brand, that is to say in my online store, to sell tomorrow. And use other cross-selling systems: commercial, partial franchises, multistores, affiliates…
Beware of comparisons
Many times an online store is compared with a competitor to measure its effectiveness. That’s fine, but beware, because we can draw the wrong conclusions. If my competitor sells so much, why don’t I sell? Well, it’s simple. We’ve all been to a bar area, and one is full and the next one is empty. It’s kind of like that. You have to think about factors such as time of existence, investment, business strategy, customer acquisition, service…the small details are very important. The famous A/B tests where you can see how a client evolves. We repeat, the online business is a business in itself. Online marketing is only one part of it:
-Selling different things online and offline
-Selling at different prices
-Taking care of service and customer care
-Investing in ERP, CRM,…
-Selling in other countries.
-Selling other people’s products.
If you’re an entrepreneur, you sell bread and luxury cars. Would you think that both work the same? That we can even put the bakery boss in charge of selling cars? Of course not. Well, with online sales it’s the same thing. It is another business that we must analyze how different, although the products sold may be the same (which we have already said is the first thing to rethink)
So Amazon will win this battle?
Probably not. While we all looked up, Amazon won from the bottom. We let it go up and it went up. But the COVID-19 has brought about a change, impossible to do without this exceptional situation: we are all going to learn to buy online. Even the service or product most reluctant to sell online will have to do so. This will cause a change of strategy in many sectors, and Amazon, which is improving its sales figures, sees how everyone is “getting smart” at a fast pace. We will learn very, very quickly, and consumers are beginning to value the online purchase of non purely online business.
This is the case of the Corte Inglés, Carrefour, which is improving its platform, and selling a lot, because the user has started to discover other online stores. Before when we wanted something online: Amazon was the king, but now we thought about buying online and seeing offers in other sites, quality, possibility to call and ask for our order, to be called to let you know they are coming, after-sales service, guarantees, invoice, possibility to exchange it easily, go and pick it up at the store (Click&Car). For all this, Amazon can see how the offer is atomized to a very important level. This does not mean that Amazon will not win, but you will see how in 1 year, the direct/alternative competitors will grow, and they will become very strong.