How can your business possibly compete with Amazon?

Specialisation and high level attention to customer relationships and engagement could be the key for businesses looking to compete in an e-commerce world dominated by Amazon.

Just as Google dominates internet search, Amazon is now the undisputed giant of online retail. This has understandably made plenty of retailers extremely worried about their place in a world seemingly dominated by Jeff Bezos’s hydra-headed juggernaut.

If you’re going to take on Amazon, how exactly do you do it? Is it smarter to accept Amazon will dominate certain categories and look to exploit the niches and sectors Amazon ignores or overlooks? Or do you simply roll over and go to the great shopping mall in the sky filled with all those other failed retailers?

Read more: Aussie retailers weigh in on Amazon’s arrival

Amazon’s pending entry to the Australian marketplace has certainly shaken things up. The responses from incumbents have been varied, with some expressing scepticism that Amazon will have that big an impact on Australian shoppers, while others say Amazon’s entry will be a game changer of epic proportions.

Other just plainly think Amazon will destroy any competition.

Harvey Norman boss Gerry Harvey has brandished fighting words in the face of the Amazon threat, insisting his company could match Amazon on price, service, and even delivery.

“If they come into our store and Amazon’s got a cheaper price, we will match that price. We will be competitive come hell or high water. We are not going to lie down for Amazon,” Harvey said in February. 

Someone who has had his share of stoushes with Gerry Harvey over the years, outspoken online retail maverick Ruslan Kogan, says Amazon coming to Australia can only be good for consumers and, perhaps remarkably, retailers.

Some analysts have already identified as one of the first possible victims of Amazon’s entry, so it might be surprising to hear positive words about its impending arrival from Kogan.

“We’d greet them with open arms,” Kogan told Bloomberg.

Rather than seeing Amazon as a direct competitor, Kogan says smart retailers (including his own business) will take advantage of a lift in the percentage of consumers spending retail dollars online and even use Amazon as an additional channel to market.

“What the data shows is that when Amazon comes to a market they change the way consumers shop. Online retail penetration grows significantly and Amazon takes a small chunk of that. So for us as an online retailer with a compelling offering to the consumer, we are embracing it,” he said.

“It would be a good thing for all retailers in general who have a unique and compelling proposition.”

One thing almost everyone agrees upon is that matching Amazon on price and delivery will be extremely tough for Australian retailers.

But as Ruslan Kogan alluded to with his comments, smart retailers might just find a way to sidestep that contest in favour of doing something unique, which might mean a niche or highly specialised offering, and offering something compelling, which augurs well for brands that have a strong relationship with their customers and are continuously working to maintain that relationship.

Australian retailers are in for interesting times. Those that can define and refine what they do, and communicate that well to customers, might stand a chance in the age of Amazon.

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