What is the ‘Amazon effect’ exactly?
Amazon isn’t killing retail, it’s killing mediocre retail, says Natalie Berg, Founder of NBK Retail and author of the rather excellent new book, Amazon: How the world’s most relentless retailer will continue to revolutionise commerce.
In a LInkedIn post, she argues that in many ways the e-commerce giant has been a force for good. “It has stamped out complacency and made everyone raise their game, all to the benefit of the customer. What would retail look like if Amazon didn’t exist? In a nutshell, consumers would be more tolerant of mediocre service.”
So what is ‘the Amazon effect? In the UK, it’s Tesco rolling out same-day delivery nationwide. M&S is trialling scan-and-go technology, allowing shoppers to skip checkout queues. Waitrose is delivering groceries directly into your fridge. Asos is allowing shoppers to ‘try before they buy’. And Zara is enabling shoppers to collect their online orders through automated pick-up points in-store.
Overseas, meanwhile, Ocado is finally securing a string of international deals, as the Amazon-Whole Foods acquisition accelerates demand for online grocery shopping. Whilst Carrefour is partnering with Google to launch Lea – its answer to the Alexa voice assistant. In the US, Walmart offers customers a far superior experience today thanks to Amazon breathing down its neck.
Berg concludes: “Amazon is almost singlehandedly redefining retail, at least in the Western world. Yes, there have been casualties and the industry should brace itself for more short-term pain as it reconfigures itself for the digital age. But this is retail Darwinism, it’s survival of the fittest. It’s evolve or die.”
“Amazon’s existence has weeded out those underperforming retailers who can’t deliver on the basic principles of being relevant to their customers or standing out from rivals. But those left standing will be stronger for having reinvented themselves in the age of Amazon.”