Amazon’s expansion and entry into new markets could be a major threat to local players who are already facing increasing competition from global online shopping alternatives. The threatened players are those in the most active categories in the local market:
58% of shoppers online are going for fashion
38% – are looking for smart phones and related products
37% – for gadgets and games
35% – for beauty products
A major entry of a giant such as Amazon to the local market could wash away the chances of survival of local players in these leading areas.
How can they survive?
Me Too strategy – as strange as it sounds the right way is to assimilate an appropriate strategy, while maintaining a local specificity relevant to the local community. Only thus will local players be able to maintain relevance and gain advantages and sporadic market victories.
What does all this mean?
Create a package of services and added value products for customers. Just like Amazon does. Bundling, but with local uniqueness.
Let’s say you have a fashion store. How is it supposed to look?
- Express Delivery – Free. In a few hours, the package lands on your doorstep.
- Exchange Policy – You have 8 weeks to decide whether you wish to keep the product (clear and defined terms for return).
- Content packages – Advice, styling, fashion shows and the like. Everything that can interest those who buy from your fashion store from time to time. This component in your package will be part of a cooperation with relevant content companies.
- Effective technologies – for example – virtual reality that allows everyone to try on and experience the store’s products before buying.
- Early bird sale offers for prime customers only
- Micro-segmental strategy and creating targeted product lines for local customers, including group bundling.
- Collaboration with local stores with complementary products – when you buy from one partner in the “package” you get a 10% discount, from two partners, you are entitled to a 20% discount, and the third partner entitles you to a 30% discount.
- Branded cash – develop your own digital currency (can be based on token technology but not necessarily). Reward customers for visiting your properties (store, website, app, blog). Make sure you award your customers a coin for every visit or sharing of content or distribution of a product. The more their wallet is filled up with your branded coins, the more involved they will be in your brand.
Of course, you cannot offer the exact same package as Amazon does – music, books, cloud services etc. Yet, with some creativity and assimilation of the same concept, even small players, local and high quality, will win this war.
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