The Amazon Effect: How Amazon Is Disrupting European E-trade

How actual is the Amazon effect? Should European retailers prepare and how? I spoke to Natalie Berg and Miya Knights, co-authors of the lately posted “Amazon: How the World’s Most Relentless Retailer will Continue to Revolutionize Commerce” approximately Amazon’s European strategy and how e-trade players on the continent can play to their strengths to fight off the world’s hungriest e-trade player.

“Amazon’s ‘modus operandi’ is to cognizance on sectors which might be ripe for disruption. It exposes those which might be mediocre and undifferentiated,” says Knights. ”So, to fight any concerns of Amazon stealing marketplace proportion, outlets need to cognizance on what the so-called “Amazon impact” manner to their enterprise: this is, how to supply and capitalize on heightened tech-driven consumer expectancies. In our book, Natalie and I urge shops and brands to examine from Amazon’s innovation and observe the ones learnings to excel at ‘what Amazon cannot do’ (#WACD), that is service, enjoy, curation and network – all elements of the buying revel in that need to already be important differentiators for regional stores and/or those targeted on a particular quarter, which include garb.”

Amazon has a complicated dating with Europe. The online behemoth regularly uses predominant EU markets – especially the UK, France, and Germany – as proving grounds for brand new technologies and offerings. However, it still holds a drastically lower marketplace percentage in Europe typical than it does in the US. In 2018, Amazon managed 35% of the United States garb marketplace, however simplest held 8% of Western European sales within the region, in keeping with Euromonitor information. Clothing and shoes is a fragmented zone, selling merchandise that are difficult to the marketplace online. Here, the disparity in market percentage is said. Providing a stark instance of the kind of hurdles Amazon faces in Europe.

“Europe remains a priority but it’s becoming harder for Amazon,” Berg defined. “They’ve constantly been up in opposition to fiercer on-line opposition, especially in clothing, but now they’re also contending with greater authorities scrutiny and the resurgence of bricks & mortar retail. In addition, political and financial uncertainty and broader shifts in purchaser priorities – i.E. The rise in experiential spending, and a developing consciousness on sustainability – make for very hard buying and selling conditions.”

Part of the trouble for Amazon – and an possibility for European shops – lies in the buying revel in, she says.

“Bricks & mortar retail is gaining knowledge of to protect market proportion by means of digitizing their bodily infrastructure. For example, over half of [UK high street clothing chain] Next’s sales are actually online, Berg says. “Fashion retailers are spotting the possibility to distance themselves from Amazon’s utilitarian photograph by means of becoming greater experiential while also leveraging their first-class belongings – their shops. Stores are nevertheless very critical for trying on and collecting/returning online orders!”
European stores, in the vein of their US opposite numbers, can convey greater experiences to the store – social media-friendly displays, smart changing rooms, in-shop espresso stores – to spotlight the see-and-sense thing of buying, that Amazon can’t offer. And this differentiation also can be translated online.

“European clients are quite comfy buying clothes online, but they see Amazon as a transactional website,” in step with Berg. “Amazon’s fundamental problem in apparel is that it’s not seen as a style destination. It’s now not even truly seen as a clothing destination. There are a few very agile and revolutionary incumbents in Europe who, unlike Amazon, are very a whole lot visible as fashion destinations. They have a clear idea of who they’re focused on and don’t try to be all things to absolutely everyone. Digitally local stores like Asos and Zalando offer the convenience of Amazon (ie try earlier than you buy and equal-day transport, for instance), however more product innovation and social impact. In short, Amazon is a technology company promoting clothing, Asos is a style destination. That’s the distinction.”

The way forward – for both digital native manufacturers and traditional outlets shifting to online – is in clear differentiation, investment inside the product, as lots or greater than the platform and a valid, evolving information of the consumer.