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  • Volker Will provides us with an intriguing insight into the world of online retail and especially into Amazon’s strategy, and talks about ways in which brands can successfully coexist in online retail.

  • Amazon rules and relentlessly dominates online retail. Is that really the case? And why? Save yourself if you can! But how?

  • Volker Will of superReal provides us with a fascinating insight into the world of online retail, and Amazon in particular. Volker demonstrates the online giant’s current dominance with the latest eCommerce and marketplace share figures, and talks about ways of successfully coexisting in online retail.

    Continuously questioning our own business models and building up technology knowledge are just two of many strategies for working with and against Amazon. 

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  • 0:22 min:

  • Jeff Bezos actually wanted to call his company “Relentless” instead of “Amazon”. As it turns out, he established Amazon and now relentlessly dominates the market with it. I will be discussing that in more detail in this talk. I would like to begin by talking about how this has happened and what he has done especially well and correctly. To finish off with I would like to talk about what brands, retailers and manufacturers can do to survive in this marketplace, and to build up a brand and a business model that can coexist with it.

  • 1:20 min:

  • Sales figures in the German eCommerce market are as follows: we have grown from around €33 billion gross in 2012 to €52.7 billion gross in the most recent year. That represents a market share of around 20 to 30 percent of all retail. If you look at how the market is broken up, then you see that marketplaces already constitute around €26 billion in sales, which means half. And if you then look at how strong Amazon is in those marketplaces, then you arrive at a figure of around €20 billion, which allows us to conclude that Amazon commands 70 percent of the marketplace market and just under 40 percent of the total eCommerce market.

  • 4:22 min:

  • Another intriguing thing is that, although Google is now virtually the only player in the search industry, whenever people search for products, they don’t search on Google, they search on Amazon. That means Amazon is already busy with its next business area, which Google will not be comfortable about. Amazon developed its marketplace six years ago, and now Amazon is on the home straight and has just invested €1.5 billion in a fleet of aircraft to build up its logistics. They are thinking ahead so as to control the final part of the journey to the customer more effectively. What does this mean for everyone else in the market? Online business is growing, which is killing off brick-and-mortar retail. The ECC has forecast that as many as 58,000 shops will cease to exist by 2020. Just imagine! At the end of the day we need to look at how we can continue to exist in a world very much dominated by Amazon.
  • 7:38 min:

  • So what is Amazon’s business model? Jeff Bezos once said he wanted to offer his customers the greatest possible choice at the best price. That’s what he has tailored his company to do, which means keeping costs down and creating as good a customer experience as possible, because that generates the most traffic, and with it growth. Profit is not a consideration at all. His entire strategy is based on growth.

  • 13:05 min:

  • What can retailers, manufacturers, brands and agencies do to keep existing and succeeding? There is some good news from BEVH, which forecasts that while marketplaces are the biggest segment, they also have the slowest growth. Multichannel providers are the market segment with the highest growth figures.

  • 13:57 min

  • I have listed five or six points showing how you can survive in a retail world dominated by Amazon:

    Question your business model.
    What is your mission? What is your raison d’être? Why do you still exist? Who are your customers? Who are you doing it for? What value do you create for your customers? What results are you able to achieve with that? Can that become a successful business model? These are all things you have to keep asking. They are also what superReal and Spryker are all about. We go to companies and examine their business models to see how that business model can be transformed so that the company can coexist and do good business.

    Build up technical knowledge.  
    If you look at company structures in recent years, as Spryker does, then you will see that the focus in the world of retail is on buying and marketing. But if you look at successful retailers and today’s business models, then you see a completely different focus. The focus is no longer on buying, marketing and logistics, it’s on building up technology and building up data.

    Develop new business models.
    Try trial and error. Become agile. There are different ways of going about this – explore CRM, explore your brand, launch a start-up. What’s important is to become more agile.

    Find out who your customer is. 
    Access to customers is everything. Who is your customer? What is your customer journey like? What are the customer’s touchpoints? What constitutes relevant content?

    Do Omnichannel, but do it right… 

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