A guide to the low-risk, low-cost solutions that will help SMEs thrive in the Amazon era
As 2017 draws to a close, eMarketer  predicts that Australian ecommerce sales will reach $32.56 billion. Of this, it is estimated that $20.15 billion, or 62 percent, will be driven by online retail sales. 
For Australian businesses working in ecommerce, this should be an exciting time filled with opportunity, instead, for the past year we’ve waited anxiously for the arrival of Amazon, the US eCommerce techtitan.
It has been reported that Amazon’s current sales in Australia amount to approximately $1 billion through overseas shipments . And this is before they have boots on the ground. However, as daunting as Amazon’s launch may be, there are ways for Australian businesses to compete with Amazon and take advantage of the fact that there will be more Australian consumers shopping online.
Let’s start by looking at what Amazon does right:
- Amongst other things their product offering is deep. Amazon are a marketplace working a multitude of different retailers, and stock a diverse range of products.
- They’re cost effective.
- The Amazon mobile experience is great.
- Shipping and delivery times are phenomenal and cost efficient.
To level the playing field, there are business and logistical decisions that Australian small to medium sized businesses (in fact businesses of all sizes) should consider. We understand that reducing pricing or increasing product offering may not be feasible for everyone, and that’s okay, because ultimately, leveling the playing field will come down to customer experience.
There are a number of low-risk, low-cost solutions available for businesses to increase engagement with consumers and provide a better customer experience.
Optimising an existing database
Regardless if a company is a small local business, a mid-tier nationwide company, or even a global enterprise, they have access to a database of existing customers that can be optimised to drive increased engagement.
One of the most cost effective ways for businesses of all sizes to optimise their existing database is through email marketing. Email provides an opportunity for continual one-to-one messaging with consumers, whilst providing an opportunity to communicate promotional and product specific information. Further to this, email marketing is a channel that drives one of the strongest return on ad spends.
Beyond email strategies, leveraging an existing database enables businesses to re-engage consumers with a highly relevant display advertising message. There are a number strategies that can be deployed to stay top of mind, such as thank you campaigns for recent purchasers, or prospecting ads to re-engage consumers who haven’t purchased with you for a select period.
Drive new customer acquisition
Amazon provides a platform that introduces new customers to new brands. However, businesses should look to strategically leverage ad strategies that bring consumers directly to businesses own ecommerce environment, and promote product discovery. The key is to reach and acquire new customers, and then actively engage and maintain those consumers.
Prospecting, through targeted display strategies, such as targeting by likes and interests on social media, allows businesses to find new customers that are relevant to a brand and more likely to purchase.
Further to this, social media specifically is a place that consumers spend on product discovery. When consumers are scrolling through their Instagram or Facebook accounts they’re not necessarily looking for a product, however, they are open to discovering new brands, products and services.
It’s important to note, that whilst Amazon may be able to deliver new customers to a business, these are customers that a business more often than not could acquire via their own marketing efforts. It’s also worth noting, that consumers driven to your site through Amazon, become loyal to Amazon, not necessarily your brand. Rakuten Marketing research has shown if a consumer purchases once from a brand, they are 27% more likely to purchase again. If they purchase twice, this number increases to 45%, and if they purchase a third time, it jumps to 66%. Certainly compelling statistics to directly attract that first sale!
Make data-driven decisions
Data is perhaps the most untapped resource available to businesses. It allows a view into how consumers are being driven to their website, and how they are interacting with a brand, allowing for the optimal allocation of marketing dollars and view into campaigns and strategies that are working, and those that aren’t.
The use of data-driven marketing, such as personalisation in display advertising can help to elevate a good campaign, to a great campaign. Using data to fuel creative decisions, provides the opportunity to reconnect and engage consumers in a meaningful way, by personalising ads with products that a customer has shown interest in.
Examining and understanding the data available, is about more than marketing. Through the use of data, businesses can make data-led decisions that drive real results. For example, capturing search volumes for out-of-stock or in-demand products will provide insight and assist in product buying decisions. Alternatively, data may uncover that consumers are abandoning the site during the checkout stage at the point where shipping fees are disclosed. This information may reveal a pattern that can be used to make changes in shipping and improve the customer experience.
Aside from the aforementioned, there are many aspects for businesses to consider when it comes to competing in an environment which includes Amazon. Starting with low-risk, low-cost solutions and leveraging existing tools such as databases and data-insights that will benefit the costumer experience, putting businesses in a good position to truly level the playing field.
We all know Amazon will invest heavily in customer acquisition, and bring new customers, who may not have shopped online previously, into the online world. This is an opportunity which all businesses, large and small can capitalise on.
About the author
Anthony Capano is the managing director of Rakuten Marketing Asia Pacific. He was previously interviewed by Dynamic Business for Where are online ads failing consumers and what can advertisers do to boost engagement?
 Asia-Pacific Retail and Ecommerce Sales: eMarketer’s Estimates for 2016-2021, August 9th 2017, Oscar Orozco