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What Aussie Businesses Must Do To Protect Against The Arrival Of Amazon

Retailers need to focus on providing a better service experience to combat the giant.

17/07/2017 1:06 PM AEST | Updated 17/07/2017 1:06 PM AEST
Steven Saphore / Reuters
The customer is always right.

The first half of the year has gone just like that, and the second half will go just as fast. Before we know it, Amazon will no longer be on the horizon, it will be fully fledged on Australian soil. Yet in a period of major change, many businesses are sitting on the sidelines, sussing out what the industry is doing in order to prepare before they take action.

Many business owners are still scratching their heads, wondering what will happen when Amazon comes to Australia, and are overlooking the most obvious thing they need to be doing right now -- differentiating their business through real, true, good customer service.

If we've learnt anything over the past 18 months, it's that customer service is the single-most important focus for any retail business in Australia both in store and online -- and there is proof.

At the start of 2016, the world's first 24-hour unmanned grocery store 'Narrafar' opened in Sweden. Then at the end of 2016, Amazon launched its first prototype grocery store in Seattle, where customers can purchase products using technology without being served by a cashier or using a checkout.

This is a true sign of the times.

The only true measurable thing that retailers can compete on is their customer service.

Topshop Australia recently went into administration, another piece of evidence and a dramatic turnaround from the much-anticipated opening of its first Australian store almost three years ago. This illustrates that being able to enter a market is one thing, but surviving in a market is completely different.

Over time customers do get bored when retailers blend into one another. Fashion labels just become fashion labels as more people start wearing them. The Topshop range was exclusive when it wasn't in Australia, so the retailer really needed to look at service differentiation as their ranges became more common.

In March, German hypermarket Kaufland demonstrated its commitment to expand into Australia by looking for land sites and staff for its operation Down Under. If you're thinking physical stores are a thing of the past, you definitely want to reconsider. Kaufland is a shopping destination, and that's exactly what customers want.

If you're still not convinced, take a look at how a lack of customer service is costing business. In February, Coles revealed that is loses a billion dollars a year due to under-scanning and theft at the self-service checkouts.

What made people choose self-service over the traditional checkout methods? Employing someone to fill a vacant checkout with little or no focus on customer service training, just to increase scanning speed, will ultimately result in customers looking for other ways to shop. And it's going full circle. As customers are increasingly dishonest at the checkout, the need for quality training and a face-to-face interaction is on the up.

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Next year, Amazon will be upon Aussie retailers. At this point, nothing is disruption proof. What is drawing customers away to disrupting competition? What made customers choose Uber first over taxis? Why will people opt to go online first, before going instore?

Customers will go where they believe they can get a better service experience. And let me tell you, online does have face-to-face service limitations, but it is beginning to do service efficiencies really well. The only true measurable thing that retailers can compete on is their customer service.

Online and instore are on two different playing fields, so it is not fair to say that online websites should 'close' when retail stores close -- because if 24-hour shopping was the need, then retailers would move to 24-hour trading.

Before the next six months go past in a flash, we need to focus on the present. Look to the very people in your organisation and ensure that quality customer service is the single most important factor right now.

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