NZ Herald Feature/Opinion Piece
I was recently asked for my opinion on how Amazon could impact small to medium businesses for the NZ Herald - Check out the full article below or visit the NZ Herald Website here
How small and medium businesses are planning to combat Amazon, increased competition
Amazon's launch in Australia brings the retail giant closer in proximity to New Zealand, putting many small businesses on edge.
While some fear the ramped up competition, many business owners are gearing up to go head to head, seeing Amazon as an opportunity rather than a threat.
The e-commerce giant is yet to ship the vast bulk of items in its catalogue across the Tasman but many predict it soon will.
Andy Mackie, managing director of retail photography business LookDepot, said he believed Amazon's arrival was a good thing for retail.
"Amazon will certainly bring an increased focus, awareness and maturity to the e-commerce sector. It enables retailers big and small to ensure their online imagery is consistent and high quality," Mackie said. "I can see Amazon challenging the big box retailers in the electronics, homewares and accessories markets but I believe SMEs will remain relatively unscathed, at least for the moment."
Feed My Furbaby founder Ben Rennell said Amazon would increase competition for his pet food subscription business.
"Petfood is a big category for Amazon so there's definitely competition," Renell said.
"Making our brand about people is a way we can differentiate.
"We know that we are going to have to be price competitive and super convenient - we have to have great logistics, that's a given - but I think we can differentiate [ourselves] by having a brand people can identify with."
Rennell said he viewed Amazon as both an opportunity, and a threat.
"You'd be crazy to not consider Amazon as serious competition, it can't be ignored, but there's definitely opportunities there to perhaps leverage some of their infrastructure," he said. "Only time will tell but I think people need to find new and different ways to compete in a modern market."
ASB Business Ventures general manager David Bell said Amazon offered incredible opportunities for businesses, but it does not come without risk.
"Amazon enables retailers who leverage its scale and capability to reach more consumers than they would be likely to achieve independently. However, small firms will need to compensate for not owning their customer experience by leveraging the analytics from Amazon to win in a very competitive marketplace," he said. "With the arrival of Amazon, New Zealand retailers will need to work to ensure they don't get left behind."
He said it is important to know Amazon had three types of sellers.
"What the Australian launch hopefully means is a more level playing field and an opportunity for local businesses to take advantage of Amazon as a powerful distribution channel and source of powerful customer data."
York Spencer, founder and chief executive of Manuka honey drink firm Manukee, said he would be embracing the opportunity Amazon presents.
York Spencer, Manukee founder. Photo / Supplied
"We won't be combating, we'll be embracing the increased distribution penetration opportunity to more cost-effectively enter the Australian market and expand in New Zealand," Spencer said.
Manukee would not be listing its products on Amazon Marketplace, he said.
"At this point, we are still assessing the opportunity versus cost versus benefit before executing," he said. "Amazon will become a key retail touchpoint moving forward for a number of New Zealand businesses, in combination with other key e-commerce and bricks and mortar sites.
"The key focus should be on developing a digital strategy to enable the customer to find your brand easily, depending on where they want to shop."
Dave Roberts, founder of floating bean bag company So Float, said he believed Amazon would have a positive impact on his business.
Ema Frost, artist. Photo / Supplied
"We've used Amazon in the US and had some great results, increasing eyes on our products and in turn increasing sales," Roberts said.
He said retailers and small firms should find a way to make Amazon work for them.
"Amazon is a huge global marketplace and is a great tool for exposure," Roberts said.
Artist and businesswoman Ema Frost said she wasn't worried about her business potentially taking a hit following Amazon's arrival in Australia.
"I think other retailers will be worried but I don't think Amazon is the place that people think of first to buy unique art pieces," Frost said. "I will certainly look into Amazon's marketplace as it could be a really interesting avenue for me try."
Amazon's arrival made her rethink about the common business model, she said.
"If we did have to adapt and change as a result of Amazon entering the market, I'd see it as an exciting challenge. I feel that as business owners we have to adapt, try new things and grow all the time."