Should a retailer who wants to survive collaborate with Amazon?

Published on 08/12/2020 in Inspire

Should a retailer who wants to survive collaborate with Amazon?

Retail expert Jorg Snoeck notices how stores are changing due to the influence of e-commerce, data analysis, and other technologies. Retailers need to approach consumers in a new way, he argues. We asked his opinion on six statements.

1. The experience in the store is increasingly the central point

Retail expert Jorg Snoeck: “I’ll go you one better: you can’t survive as a retail company without that little something extra. The aspect of experience prevails, especially in the culinary world. Technology plays an important role here. In China, there are concepts where the consumer scans ingredients with a QR code and an app offers a choice between three solutions: a chef who cooks them then and there, the finished product gets delivered to their home, or all the individual ingredients can be delivered to their home.”

“At MAD in Copenhagen, you can follow the preparation of recipes via live streaming, with ordering options, of course. In fashion retail, major players like Zalando also use other retailers’ stores as warehouses, from which they send orders directly to customers.”

Both major players and smaller, local retailers should use digital technologies, like data analysis, to their advantage.

Retail expert Jorg Snoeck

author

2. Digital technology is becoming indispensable to outsmart the competition

Jorg: “It’s true! A few years ago, everything seemed simple: draw a geographical radius around your store and you knew the sales potential. This is no longer possible due to the changed socio-demography. You have to know your customer through and through and engage in the conversation. It starts online, with the first purchase. Once the consumer is on board, you have to cash in on that customer relationship.”

“Both major players and smaller, local retailers should use digital technologies, like data analysis, to their advantage. A true digital transformation is inescapable. For example, the app by the Dutch chain Albert Heijn estimates when you need a new bottle of shampoo with 97% accuracy based on your purchasing pattern, and puts it at the top of your suggestion list.”

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3. You have to collaborate with Amazon in order to survive

Jorg: “For those who sell a unique product, I say ‘yes’, wholeheartedly. Keep in mind that Amazon is copying Chinese traits and doesn’t hesitate to counterfeit high-selling products under its own label. Stores that offer more of the same can expect an unbeatable price war on the Amazon platform: consumers compare and choose the cheapest provider.”

“More and more manufacturers are selling directly through Amazon, thus shutting down the retail channel. They open flagship stores themselves, where the customer can see, touch, and experience the products. They receive information from ‘real’ people there, rather than from a chatbot, before ordering the items online.”

4. Service makes less of a difference in digital times

Jorg: “I disagree. The Excellent Group is still doing well with its electronics products. Craftsmanship and trust still win hearts. With its stores and inline service, Coolblue embraces the ‘stone-through-the-window’ principle: customers will be quicker to choose your business if they can throw a proverbial stone through your window in case of problems. So you have to remain very accessible, especially for dissatisfied customers.”

“Ideally, in-store services will be extended digitally because disappointing a customer is out of the question today. When a garment in a certain size or color is unavailable, the store clerk must quickly obtain it from another location.”

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5. Sustainability is becoming an important selling point

“This is only partly true. Young people are aware that the bill for the consumer society is coming their way. Their grandparents are fighting the same battle because they cherish their good health and that of their descendants. So we think sustainable, but when a price difference occurs, that quickly takes precedence. Consistent sustainable purchasing therefore remains primarily for those who have money to burn, so to speak. Given that the Covid-19 pandemic will cost a lot of people their jobs, I don’t see it as a catalyst for change.”

6. We buy local and Belgian because of the Covid-19 pandemic

“The same rules apply here as for the sustainability aspect: price usually takes precedence over locality. The ‘made in Belgium’ argument no longer has the resonance it once had. The Antwerp Six were a household name in the world of fashion, but are now in their sixties. We need to give our talented youth opportunities and highlight their achievements. As Belgian entrepreneurs, we still have too much of an inferiority complex.”

Jorg Snoeck, also called ‘the Captain of Retail’, is the founder of RetailDetail, a communication and networking platform for retail and FMCG professionals in the Benelux.

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