2017 wasn’t an easy year for retail but, for some, 2018 is proving to be even more challenging. Toys R Us and Maplin have gone into administration, unable to survive in today’s increasingly competitive landscape. What might have made the difference? They needed more than just an added digital side to a bricks and mortar business – retailers need a complete shift of thinking, both when it comes to how things are run and their approach to customer experience. Amongst today’s retailers, Amazon’s approach is leading the way and their customer focused approach offers lessons beyond that sector for both B2C and B2B brands.
Amazon has transformed consumer expectations of online shopping, and become the definitive leader in both fulfilment and logistics. It continues to grow, expanding its e-commerce offering whilst amassing huge revenues from cloud services. It’s also proven adept at acquiring and integrating new brands to its platform and expanding into new sectors. Basically, in any discussion about commerce and customer experience it’s become impossible to ignore.
Amazon’s success is rooted in the way they approach innovation – with a continuous stream of new, testable ways to improve its service. But the foundation of this is its long-term focus on the customer. Its digital strategy has been aimed at taking care of the customer experience (CX) basics first, and ensuring each new change brings results whether it is immediately apparent to the end user or not. It could be improving delivery times, expanding fulfilment or logistical capabilities, or reducing the online and offline divide. As other retailers look for ways to compete and in some cases, even to survive, it’s worth digging deeper into the symbiotic relationship between Amazon’s customer-centric innovation and their growing B2B proposition.
Expanding its business offering
After heavy investment in IoT and cloud technology, Amazon Web Services (AWS) has become the profit engine for the business, with around 30 per cent market share of the whole cloud computing infrastructure market. It is a vital part of its business structure, and is responsible for the majority of the company’s growth over the past few quarters. A few weeks ago Amazon reported that this service provided the bulk of its profits in Q4 of 2017. AWS operating income grew by 46%, and accounted for 73% of net income for Amazon.
Amazon Business – launched in the UK in July 2017 – is a relatively new addition but it’s already acquired over 1m customers. With procurement system integration and VAT invoicing, coupled to Prime-style service, it’s allowing them to connect with corporate customers in ways other businesses may find difficult to replicate. Amazon invested in providing customer-negotiated prices, large order processing andgot involved in electronics industry standards efforts. Along with Amazon Business Analytics, it’s a powerful indication of the ways B2B brands must develop personalised, customer-focused interfaces – and how they can do this by drawing on success stories from the B2C world.
Mobile-friendly navigation and omnichannel thinking for B2B suppliers of even the most basic goods and services are a must. Essential, too, is the unlocking of data streams from customer behaviour, to provide analytics and fuel the personalised experiences we increasingly expect.
Businesses must go beyond simple replication of what has worked for e-commerce giants. A flexible market differentiation strategy, in response to ever changing consumer needs and technology trends is vital to ensure changes are more than a one-off fix. At BIO, we’ve worked with Arrow Electronics to help them get online and expand beyond B2B to sell directly to consumers. For them, making use of their existing strengths involved creating a bespoke collaboration facility for business customers to talk directly with technical experts.
A customer-centric approach
The boundaries between B2C and B2B are increasingly blurred, but the impulse for disruption has been driven by consumers. Amazon built their offering by aiming for lowest price, biggest choice and fastest delivery. With CX at its core, it has been able to transform the retail world. They were the first company to offer 1-Click ordering (introduced in 1997), launch 1 hour delivery with Prime Now (June 2015) and are now trialling and iterating Prime Air – a next-gen delivery system that promises to get packages to customers via drones within 30 minutes.
It’s extending this level of service from B2C to B2B that has delivered success for them. They benefited from the trust and familiarity built up with its users, and understood that any move from a B2C to B2B offering should feel like a small step. A business might offer a B2B service, but the decision makers are still consumers.
Room for improvement
It’s not all plain-sailing for Amazon, especially with recent challenges around its data management on AWS. Misconfigurations gave serious data headaches for several high profile users including Uber, Time Warner and Accenture. The issue exposed huge amounts of data and although Amazon responded quickly, with a tool to help users make corrections, it has upped the pressure to find long term cloud security solutions.
Merging B2C with B2B
Amazon has become a leader within ecommerce for its ability to efficiently serve its customers. The company has relied on the introduction of new technologies, but also a focus on getting the basics right – whether it’s for consumers or businesses. And now by blending services for the B2B and B2C worlds, they have managed to create a portfolio of self-reinforcing products that gives Amazon new revenue streams and vital data.
Ignoring the boundaries that have traditionally kept B2B and B2C business models apart has afforded them a powerful position. For other brands to stay competitive in the retail game, they don’t necessarily need this type of diversification – but they must be able to translate Amazon’s CX principles for their own businesses, and build towards a close, credible and meaningful relationship with their customers.
Stu Whyte, Head of Strategy at The BIO Agency
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