Are You A Brand, Or Are You Amazon?
By Matt Pillar, chief editor
July 2016 Innovative Retail Technologies
I was participating on a panel at a large conference a month or so back when the moderator asked me how important it is for merchants to “be like Amazon.”
What a silly question, right? Who wouldn’t want to be like Amazon? The company’s domination of e-commerce is ridiculous. During the 2015 holiday shopping season, it captured 38 percent of total e-commerce spending. Thirty-eight percent! It took 21 of the next-best-performing e-commerce merchants behind Amazon to equal that figure. Duh!
That’s not, however, how I responded to the question. For the majority of the retail market, trying to be like Amazon is by-and-large a solid mistake.
If your brand is your lifeblood and you protect it as such, jumping on the marketplace bandwagon is attempted suicide. That’s why you won’t see Fendi inviting third-party accessory designers to a marketplace party anytime soon. I can hear Fendi’s side of the conversation now: Sure, you can sell your $30 necklaces on our site, right next to our $3,000 messenger bags. Sure, you can manage your own inventory and fulfillment and experience with our customers. Sure, we’ll have every socalled artisan manufacturer of Chinesemade necklaces that are $5 cheaper than yours banging down our door. Sure, we’ll allow our brands to comingle. Yeah, sure.
Now, if your goal is to grab market share by off ering a giant number of previously inaccessible categories in a large country full of underserved consumers, by all means, consider the marketplace model. That would make you Best Buy Canada, by the way. You can read that story in our May issue, or at innovativeretailtechnologies.com.
For the rest of us — and the rest of us are composed largely of specialty retail establishments — affiliate marketing partnerships with thoughtfully curated and equitable brands are perhaps a better bet and an entirely different story. At the aforementioned conference, I met Ami Arad, CEO and founder of an incredibly unique San Francisco-based men’s club/lifestyle retail store/ restaurant/bar/rich man cave lair called Wingtip. This guy effectively runs a miniature brick-and-mortar Amazon for wealthy guys, with the cool exception that in his “store” you can choose from more than 100 expensive and handcurated whiskeys to sip on while you shop for a $200 shirt that was vetted by Arad himself before it hit his shelves. That’s a marketplace concept for brand-conscious merchants.
But, what about Amazon’s big plans for apparel, you might ask? Didn’t Cowen investment bank analyst John Blackledge recently predict that Amazon would be the number one U.S. apparel retailer by 2017? Isn’t Amazon private labeling an apparel line? Isn’t that a significant threat?
Yes, he said that, maybe his prediction will come to fruition, and yes, Amazon is a clothier now. Target is nervous. Walmart is fidgeting. Macy’s is sweating. And so, too, should their non-Amazon suppliers be sweating. But you? The fierce defender of your brand’s integrity and your customer’s loyalty? The merchant of fullprice, full-value products and customer experiences? You’ve got nothing to sweat. You were never afraid of big box department stores; why shudder at big box e-commerce?
I don’t mean to discount the elephant in the room, but it’s been in business since 1994 and only recently posted profi t worth remarking on. That impressive performance comes in large part from tripling Amazon Web Services sales this year. That’s right, if you really want to be like Amazon, perhaps you should consider adding B2B cloud services to your merchandise mix.