The benefits of the Amazon model are overstated – it’s time for true disruption

By Thomas Vosper, co-founder and CEO of ecommerce startup, aisle 3

It is undeniable that Covid jumped ecommerce into 2030. A 2021 report from Retail Economics and Natwest discovered that since the pandemic began, nearly half (46%) of UK consumers have purchased a product online that they had previously only ever purchased in store. Meanwhile 32% of consumers surveyed said they will continue their new ecommerce habits in the future, a figure that rises to 40% in 45-54 year-olds. The big winner? Of course the market leader Amazon. In fact it recently reported its sales surged 44% in the first quarter, roaring ahead of even the most optimistic earnings forecast.

However just because many consumers are using it more – doesn’t mean it is perfect. In fact far from it. The ecommerce experience led by Amazon is rife for disruption and despite the heady earnings heights bears all the hallmarks of a typical industry dominated by one player. Meaning a lack of competition leads to often poor outcomes for customers and brands on the platform. Here are several reasons we should look to an alternative model for ecommerce.

Poor brand recognition

Retailers might be confused with buzzwords ‘multichannel’ and ‘omnichannel’ alongside the domination of Amazon and their marketplaces. Retailers struggle not because of physical or online presence but because of lack of brand recognition. Primark’s sales may have dropped to zero when the stores closed but customers were going to return. However this is not the case for retailers online who have ‘created their landlord’ by bolstering Amazon by becoming sellers on its platform. Brands and retailers need to be very wary of how Amazon has increased its iron grip on ecommerce. The challenge is consumers simply don’t remember or recognise many of the brands they buy via Amazon. But they do remember Amazon. If you can’t remember who sold the last thing you bought on Amazon there is the problem for brands and etailers engaged with marketplaces and selling multichannel.

Losing control of crucial customer data

In the data-driven digital world, data is power and enables brands to shape their offering around the needs of their customers as well as providing the right offers at the right times. The trouble with chasing sales on marketplaces like Amazon is they own the customer data and dilute your brand. Retailers therefore need to be bold enough to find the sales channels that have active shoppers and will have a collaborative relationship with them. The marketplace model has a lot to offer – but not one that bars from entry the people that make it function.

Lack of transparency

There is a lack of transparency for shoppers in the current ecommerce experience in general. It’s pretty easy to use a companion site to find a deal on complex products like car or life insurance but try finding the best deal or quickest delivery for a pair of wireless headphones without opening a bunch of tabs on your browser and checking a myriad of sites. We may instead get sucked into Amazon because it is easier but sponsored posts rank higher. Interruption advertising is the scourge of the internet and there is no excuse not to do better. We need to focus on how we can improve the customer experience, bringing in some of the qualities people like about the physical shopping experience. This means bringing more of a human-centred experience focusing on the needs and individual requirements of shoppers. Shoppers require a trusted personalised experience. They are not receiving this now.

The myth of customer-centricity

Many businesses follow the Amazon rhetoric about putting the customer first – but I think that motto could be disputed. Most businesses say they put the customers first only because that’s what they think Amazon do. Amazon has a stranglehold on the market and is focused relentlessly on the bottom line. 75% of the products above the folder are either adverts or Amazon own brands. This means Amazon is showing you what they want you to see, not always what you want to see!

Additionally an investigation by Which? Consumer group in 2019 revealed a flood of fake five-star reviews for tech products. Certainly alongside genuine reviews, Amazon reviews contain a mix of incentivised reviews, corporate espionage or comedians, whereas a vote from a friend is worth 100 anonymised reviews.

The game changing event of the pandemic has undoubtedly turbo-charged ecommerce, but just because Amazon’s sales have rocketed on the back of it doesn’t mean we should accept its dominance. Market dominance doesn’t necessarily equate with a great customer experience and for the brands on the platforms they are less partners than helpless captives. With so much attention on ecommerce – we should take this time to focus in on how we can do better. It’s time for real innovation that benefits both shoppers and retailers.

By Thomas Vosper, co-founder and CEO of ecommerce startup, aisle 3

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