Temple & Webster CEO Mark Coulter says he’ll “probably” partner with Amazon when it lands Down Under, but has warned that widespread adoption of the American e-commerce giant’s platform could be a “red flag” for local retailers.
Speaking to an audience at Online Retailer on Thursday, Coulter declared that Amazon is both a friend and foe for local retailers, and that getting the balance right is the big question mark.
“We’ll probably play on Amazon like we do on Ebay, but we’ll go in with our eyes open,” he said.
“I think of Amazon as the Westfield of e-commerce,” Coulter remarked. “[It] knows all the customers coming into the centre, knows all the transactional data, all of the intent data and then uses that to build a ground field Westfield store…gives those customers better service, lower prices and then removes the escalators.”
“They’ll take your best sellers unless you have exclusive licensing, tight control of your product, a service or cost advantage – some sort of difference.”
Coulter believes Amazon is the “riskiest” channel to sell through, describing Ebay as a purer marketplace that poses less of a threat to retailers.
Mirella Sago, general manager of pureplay footwear retailer Styletread, said that retailers looking to sell on Amazon need to be aware that they’ll be expected to comply with the highest possible standard of customer service, and that this would require significant investment.
“You basically need to have everything as Amazon desires, because as a retailer they are going to want to work with you, they’ll promote your product and that’s going to give you more sales,” she said.
“If you don’t already offer really strong customer service…you’ll have to look at employing more people and developing your policies, because they won’t let you mess around with that customer you’re now sharing.”
Coulter agreed, explaining that Temple & Webster employs dedicated Ebay channel managers and customer care members to provide service specifically to their marketplace customers.
“We look after Ebay probably better than a Temple & Webster customer,” Coulter said.
“Unfortunately, there’s just no alternative, the way they punish you if you don’t do all these things really does affect what you will sell,” Sago added.
There is a clear upside though, according to Coulter, who is bullish on the prospect that Amazon will reset customer expectations around delivery, making it cheaper and thus more efficient to transport bulky goods to customers.
“If they can find a solution to bulky, that’s a good thing,” he said. “We’re already the market leader, so I’m not going to grow by stealing share from other online retailers, I need to get more people shopping online.”
“If they can get logistics cheaper, faster and get more people into the market then it’s a good thing for all of us.”
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