What is Amazon Effect and How it changed the Online Business Sector


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Everyone is aware of the fact that people are spending more time on the internet. People are becoming more dependent on technology as they spend more time with their gadgets everywhere in their daily life. Technology has come so far that they offer everyday services needed by people effectively. These services include online shopping, food delivery, grocery delivery, etc.

It should be noted that Amazon has played a major role in changing the grocery business sector’s landscape forever. These changes have caused a significant digital disruption in the grocery industry. This effect is considered to have created one of the substantial shifts in the operations of the business. This was termed as “Amazon effect” and it was briefly explained in a Forbes article. Since the company debuted in 1994, it drastically changed the way people shopped, as it introduced customers to a new way of shopping, which they called “frictionless shopping.”  

Customers were blown away by this method, and they demanded the same experience everywhere, such as sitting in front of a computer screen, or inside a shopping mall. The impact of the Amazon effect can be seen worldwide until today, as most of the retail shop owners are offering a technology-based experience to their customers. Here are the three ways on how a retailer can counter the Amazon effect.

Use brick and mortar stores to support online stores:

Brick and mortar is the traditional street style business or store that offers products and services by direct interaction. The customers can meet the employees face to face during a purchase in a store owned or rented by them. These stores were the most popular options for people until the introduction of web-based businesses such as Amazon and Walmart. People started to drift towards these web-based services as they offered more flexibility and can be operated at low costs when compared to traditional stores. 

While people are still visiting physical stores to buy certain products, the companies are well aware that the trend will fade off in the near future. So offer the stores more purpose than selling clothes in the physical spaces, they have started to provide online sales. This platform helps the customers to choose their products online and also has the option to return them. Several stores across the world have launched their platform to offer online shopping experience for their customers. It is wise to offer special discounts or offers for users who register online. Make sure that the actions that take place in online platforms are well coordinated with the offline stores. This increases the reputation of your brand in the market.

Track customer behavior in store:

Everyone is well aware of the fact that analytical tools help to improve the performance of the website and to increase the revenue in the digital sector. Still, these digital tools are getting increasingly effective in offline stores. Ecommerce websites have helped to track the course of the customers while they shop. Using this strategy, the company can find the sections that people buy less compared to others. This can also be used to track customer behavior and learn more about their preferences and frequency of purchases. You can also learn more about their favorite sections in the store.

Leverage mobile technology in the store:

The rise of e-commerce has led to a decrease in the revenue of the brick and mortar stores. So, it has become inevitable for these physical stores to have an online presence to ensure their survival in the market and to take advantage of the benefits of that particular business model. People are becoming increasingly independent and do not wish to stand in lines for billing the groceries they bought. Customers should feel satisfied with their purchases, and their shopping experience should be made easier so that they don’t have to put in any effort. Mobile technology is one of the best ways to offer products instantly to customers. The only thing that needs to be done here is that your marketing team should come up with some innovative ideas and marketing plans to attract the customers and to offer them precisely what they need by taking advantage of the technology. They should come up with creative strategies to make use of digital disruption caused by the “Amazon effect” to their business to maximize the revenue. 

For example, try to offer a cup of coffee free for a customer who walks into your store or send a text to them that they will get a cup of coffee as a complimentary if they walk into their store to purchase something. This is called push marketing, and these are some ways to make the customers happy and feel appreciated. SOTI, a global leader in creating innovative solutions for business that helps them to reduce the cost and complexity of their business, has published the following report based on a recent study.

  • Ninety-two percent of people prefer to buy products from a store that offers mobile experiences.
  • Seventy-three percent of people prefer mobile payments over other methods for faster checkout time.
  • Sixty-five percent of them want location-aware coupons.
  • Sixty-one percent of people prefer other methods over speaking with sales associates.
  • More than Four-seven percent of people prefer personalized services.

Why is this a wake-up call for the food industry:

Food retail stores still see Amazon as the primary disruptor of their business and as a competitive threat in the ever-changing grocery industry. Russell Redman had mentioned the following statistics in his Super Market News article, which was entirely based on the data obtained via surveys on grocery stores conducted throughout the country:

  • Eighty-three percent consider Amazon’s entry into the grocery sector as a significant threat to their stores.
  • Thirty-five percent of them needed to come up with plans to compete with Amazon on Prime Day as they give huge discounts on many products.
  • Less than 25 percent believe that the customers are satisfied with the current services offered by traditional supermarkets.
  • More than 71 percent of them agree that grocery stores should not implement digital services to provide products for their customers as they might lose their business to other major firms in a few years.    

The online food delivery services have already transformed the food and beverage industry differently as more people have started to use this service. The existence stores should develop new strategies to embrace technology and implement new strategies to improve the overall shopping experience for the customers.

Bottom line:

These apps are inevitably becoming the digital world’s future as more and more people are getting dependent on it as they provide the necessary services they require in their everyday life. But there certain some business types that are suited to brick and mortar form and cannot be offered as an online service such as gas stations, auto repair shops, and accounting firms. If you would like to build your business with these apps, all you need to do is get in touch with a grocery app development company specializing in developing these applications. They will customize the application according to your requirements, to kickstart your business and yield maximum profits.

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