This article was published on April 22, 2018

Selling products on Amazon severs the ties with your customers

Amazon is a double-edged sword for your business.

Selling products on Amazon severs the ties with your customers
Ivan Mazour
Story by

Ivan Mazour

Ivan Mazour is a Russian-born, London-based serial entrepreneur. He is the CEO and Founder of Ometria – an AI powered customer insight and c Ivan Mazour is a Russian-born, London-based serial entrepreneur. He is the CEO and Founder of Ometria – an AI powered customer insight and cross-channel marketing platform built specifically for retailers. Prior to starting Ometria Ivan was an angel investor, helping over 30 UK technology start-ups grow through their early stages, including successful companies like What3Words, and accelerator programmes like Entrepreneur First.

“My advice to anyone starting a business is to remember that someday I will crush you,” comments Jeff Bezos, sitting on his throne at Amazon HQ.

Let’s be clear, Jeff Bezos never actually said those words — although some may be able to imagine it. In fact, this quote featured in a recent satirical article about Amazon’s ability to acquire businesses left, right, and center and Bezos’ growing hold on the ecommerce industry. But, the article hit home because, as proven by their recent financial results, Amazon is here to rule.

When you consider what Amazon offers those who sell via its marketplace — being able to easily sell internationally; the ability to piggyback on the retail juggernaut’s incredible technological innovation; being part of arguably the world’s biggest product search engine — it’s not surprising that brands are seeing value and jumping on board.

However, there’s one key point that is being forgotten among the talk of 30-minute drone delivery and ordering your kitchen roll via Alexa: when you sell through Amazon, these customers are Amazon’s, not yours.  

The future of online retail

While in many ways Amazon embodies the future of online retail, the future also arguably lies in customer-centricity and creating amazing, personalized brand experiences that foster so much loyalty that customers couldn’t possibly conceive of shopping elsewhere.

Such experiences depend on data, and increasingly this means harnessing AI and machine learning to pour over everything you know about a shopper — from the things they buy (both online and offline) to what they’ve been browsing on your site lately – in order to predict what they’re going to buy next, the right moment to prompt them to make a purchase, and which channels to market to them on. Amazon itself knows this, and has been at the forefront of data-driven marketing and personalization for a long time.

Trouble arises when retailers put all their metaphorical eggs in their Amazon shopping cart. In selling through the Amazon marketplace, a retailer surrenders all access to the people buying their products. This iron-tight grip on the customer means a retailer can’t even contact or market to people who have bought their products — what hope do they have of creating any sort of meaningful relationship out of this scenario?

What’s more, when we consider that customer data is fast becoming the lifeblood of successful ecommerce, every single brand interaction and touchpoint must be taken into account, analyzed and turned into personalized marketing. In ring-fencing customer data, Amazon prevents sellers from truly understanding who shops with them and using that insight to retain them in the future: you can’t feed a machine learning algorithm patchy data and hope that the outcome will be anything meaningful.

The lessons for retailers

Amazon’s main loyalty strategy is its ubiquity. It is everywhere, and it has everything you could ever want.

However, even Amazon has other strategies, like Prime, to engender loyalty because it knows that consumers have options. And without the amazing one-click customer experience, building that loyalty would be so much harder.

What other retailers and brands can learn from this is that consumers are now expecting to see something they want and immediately be able to buy it in a few clicks or taps. Complex journeys and a bad customer experience is not going to be accepted — they would rather click away than go through it. But a great customer experience will be remembered, and treated with respect and loyalty.

While clearly it would be foolish to call upon brands to stop selling via Amazon and other marketplaces entirely, retailers should certainly consider exactly how much of the customer relationship they’re willing to give up in return for the benefits Amazon offers.

The great news is that Amazon levels of customer experience and personalization are possible without having to sacrifice building meaningful, long-lasting relationships with your customers. For all aspects of the customer experience, tech that used to be the preserve of retail giants is quickly becoming accessible to everyone — from super quick fulfillment to individually-personalized marketing messages.

In a world where choice is infinite, where marketing can be presented to the consumer at absolutely any moment, and where the consumer’s expectation is so high that only a perfect experience will do, marketers will have to re-focus their attention on long-term relationships with customers: will their customers buy once (perhaps via Amazon) — and never return? Or will they become loyal and keep coming back? Only the latter makes for a truly successful business in today’s world. And it will be even more true in the future.

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