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Amazon makes us work harder

When WPP’s Martin Sorrell says that Amazon keeps him awake at night, then you know no one is safe.

When you own a significant share of the digital world’s production means, then you either work with it, or find ways to work against it. No one seems yet to have worked out how to work against Amazon.

However, there is a third way. That is to use the pressure Amazon and other world-changers exert to improve your business.

In my business, the best example is a new generation of marketing automation software companies that use machine learning to move the goalposts, currently set by the likes of Pardot and Hubspot. You know what happens next; the start-ups get bought or the incumbents up their game.

For those with deep pockets and an arrogant view of their own wonderfulness, acquisition is of course easier. However, for everyone else, the answer is to refocus on your unique strengths. In Fieldworks’ case, it is real industry experience, insight and networks that no one else can even touch.

For retailers, the job is much harder. In sectors where price is the primary differentiator, it’s hard to see what can be done differently. Price optimisation tools deliver marginal returns and they are rarely sustainable. And anyway, Amazon is coming to change that model with Amazon Fresh.

However, there are other pressures Amazon exerts that retailers can respond to positively. Take Amazon Go, the no checkout store. This presents many retailers with a golden opportunity to rethink the way they are planning their POS developments and upgrades. Instead of plotting a logical but time-consuming path from fixed to mobile POS, retailers can take a flying leap into the future, where customers are effectively managing their own checkout.

It is not hard to see Amazon creating its own POS software business, once it works out how to combine the many technologies required to enable true self checkout. And then, all POS vendors will be faced with yet another competitor – one who may simply be too hard to catch up with.

No one is immune to Amazon. And therefore, the answer must surely be innoculation; a small dose of the etail giant’s virus, in order to take on some of its DNA.

Martin Sorrell already gets it. “We put together an agency in Seattle,”-  the location of Amazon’s headquarters – he says, “specifically to deal with Amazon and cater to Amazon.”

It will be interesting to see retailers’ response. Will they recognise Amazon as a competitor, and will they respond? They won’t win the war, but at least they will be part of the battle.


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