How Can Online Brands Compete with Amazon?

How Can Online Brands Compete with Amazon?

When the Lego group started focusing on their Net Promoter Score (NPS) or how satisfied the customer was, they found a direct correlation with the increase in each households spend.  Just one of the great takeaways from the Savant eCommerce two day event in London this month that included speakers from Lego, Phillips and more. Unfortunately we could not make it in person on the day but we were glued to the stream of e-commerce insights coming from the event each day.


One of the main topics speakers touched on was how to compete with in an increasingly competitive ecommerce space. In particular competing with online retail behemoths like Amazon who are moving into profitable product categories and quickly dominating them.  Andy Hobsbawm, CEO of Evrythng highlighted the Amazon private label brands launched over the last 15 years and they are now on track to become the biggest US retailer of fashion.


Amazons private label brands

Image c @nupur_m




Geoff Scully outlined how they in LittleWoods Ireland fuel their success by being customer focused first. They  drive the business with a mobile first approach and a commitment to using data for their decisions.


Look at other categories and learn what drives sales for them suggested Troy Collins of SecretEscapes and Fashion retailer endource.com.  “Use the power of try & buy. Fashion is doing it, what about other categories? Consumer electronics trials?”


"Don't forget that customers are real people and we need to give them experience" reminded Simon Lloyd from AXA insurance.  A sentiment carried through to all levels of the company in LittleWoods. Geoff and the team monitor the NPS score from customers and have linked it with an incentive scheme for all company employees to ensure they take all decisions on behalf of the customers. The results of this customer focus and NPS score is a direct connection to higher spend per household for the Lego Group.


Lego Group eCommerce NPS score

Image c @camarquez


It’s about what you (the customer) want. Not what we want you to have”  - Glenn Abell, VP of Lego Group.



Data vital to optimising the sales funnel and customer experience.


Marco Roncaglio is Sr. Director Digital & CRM in Philips and he talked about how the brand is engaging and converting shoppers at each stage of the customer research and the buying funnel.  Data is used in each step of the customer journey to match personas with the right content.


Philips product content


Image c @e_fundamentals


Phillips created an in-house team to drive through data the above framework. Of course it does not always go to plan explained Lego pragmatically. “Things that look promising on paper sometimes don't deliver. Keep tweaking, innovating, playing” .


How to compete directly with Amazon?


“Data is the new oil” according to Wired. And you can see how Amazon are using data to dominate markets. Amazon have the ability to look at their own best selling categories and launch their own white label products.  They have been doing this since 2004 in categories such as Outdoor furniture, Home goods, Electronic accessories and fashion.  As John Maltman pointed out they have an “unparalleled ability to disrupt business & create "amazoned" categories”.


Amazons developing capability

Image c @camarquez


But even Amazon cannot become all things to all people. Retailers need to become brands and the only way to compete is with non-replicable differentiation as the panel on the day discussed.
Just like Amazon data is key to helping find and establish this differentiator.  Which leads back to the customer above.  “To overcome the challenge of brand loyalty: listen to customers and learn.” Which is what Vicky Ladeh helps ecommerce customers do with their Fits.me technology.


But don’t just look at your customer facing side to become more competitive.  A trillion dollars a year are lost due to products not being at the right place.   An very scary number from Andy Hobsbawm but an opportunity to use warehousing / logistics as a competitive advantage.


Social media as key competitive advantage when going up against large competitors with big pockets.  Marco from Phillips suggests focussing on less ideas customer acquisition channels but picking the high performing ones and doing them better / smarter.


Leveraging content and smart targeting

Image c @camarquez


Limit the number of promotions you run. According to Lluis Martinez-Ribes, too many promotions tire customer's brains. Their brain works over time processing them.  Increase performance  with one big promo vs twenty tiny ones.


And also look at your technical implementation. 90% of data on ecommerce websites  is unstructured which makes it hard to Google to identify it and display it in search revealed Alastair Stirling of Google retail.


In the end, Marco Roncaglio stresses,  you must measure what you are doing and the results if you want to grow.


What do the next five years hold?

Video only Facebook suggests one speaker.  Selling on market places like Amazon, eBay and others needs to become part of your strategy.  And focus on a smart, agile and  ready team to prepare for challenges like Brexit and what ever comes next.

“eCommerce is 9% of US retail but 54% of total retail US growth!” – US official census gov data 2017.


marketplaces-report

Posted by: Alan O'Rourke - 20 November 2017

Post tags #onlinemarketplaces #ecommerce

Related posts