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Beating the Amazon Effect: The how-to guide for every Australian business

Preparing for a future where your business remains relevant and proactive involves putting your customers first.


Amazon’s effect on the Australian market is much debated. The retail behemoth has already begun to baffle businesses. But what if businesses took a step back to look at the constant in the equation? What if they focused on the customer, rather than the competitor?

We all know what it’s like to be running in a race. Do you focus on the finish line or on someone who is closing in? If you get distracted by the runner who takes the lead, then you might find yourself watching their back instead. Winners concentrate on the finish line, obsessing about their own continuous improvement.

In the same way, the tendency for businesses is to lose focus on their customers and opt to race with their competitor. The US has already witnessed the effect of Amazon’s power to turn heads and get in front. Businesses became fixated on their competition and forgot who they were. Naturally, their customers did too.

Focusing on the constant in the equation: Your customer

Merely copying or reacting to Amazon’s movements is a scary proposition for any business. The founder of Walmart, Sam Walton, once said, “If you want to compete with me, do what I don’t do”.

Jeff Bezos did just that and founded Amazon. In its early days Amazon wasn’t seen as competition and retailers continued to focus on the Walmart’s of the world. Today, the focus is on the Amazon Effect. Who knows what the Effect will be tomorrow.

In a landscape of changing tides, it is vital that Australian businesses stay true to their customer. In Walton’s words, “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else”. It’s easy to obsess about Amazon, and forget why you exist. Beating Amazon starts with focusing on your customers and your strengths to service them.

Inventing your way out of the Amazon challenge

Amazon presents a challenge not because it is Amazon, but because of its customer-centricity. Amazon does its business well because it obsesses with its customers, not its competition. It’s worth taking some of Bezos’ own advice: “One of the only ways to get out of a tight box is to invent your way out.” So how then do you invent your way out of the Amazon challenge?

Hire the right people

Winning the battle for relevance begins with hiring the right people, in the right place, doing the right thing. Central to this is the need for leadership teams that set clear goals, define what success looks like, and ask the right questions.

Amazon faces as many, if not more, challenges as any other business. Developing a team that celebrates bright minds and mutes the HiPPOs (Highest Paid Person’s Opinion) allows for innovation and speed in responding to these challenges.

Know your customer

Australian businesses are often more product-centric than they are customer-centric. But Amazon makes it clear that understanding customer behaviour is vital to success. Many businesses have anecdotal data, but this is no longer enough.

Businesses need to be leveraging Big Data for data-driven decisions. The first question a data-driven organisation asks itself is not “What do we think?” but “What do we know?”.

The power of Big Data does not erase the need for human insight, but it does change the order in which businesses process decisions. Research shows that the more companies characterise themselves as data-driven, the better they perform on objective measures of financial and operational results.

Nimble culture

Creating a healthy and nimble culture is a crucial element in the race against Amazon, because it provides the fuel and adaptability to field the changes. A nimble culture allows you to fail, learn, and perhaps more importantly, enables businesses to drive and implement change. It shapes a mindset that is open to experimentation and failure as steps on the path of invention.

Simply put, prepare for a future where your business remains relevant and proactive. It’s not about beating the Amazon Effect, but rather exceeding your customers’ expectations.

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