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What has Amazon done to FMCG?

Love it or hate it, Amazon is dominating eCommerce. On Black Friday in 2017, Amazon accounted for 55% of all US online transactions. How can anyone else, and FMCG brands in particular, compete with such domination?

The harsh truth is that if FMCG brands don’t have an Amazon strategy, they’re going to have to create one. Nearly a third of global FMCG sales are arriving via eCommerce, and although brands are investing time in their online channels, have they truly harnessed the power of shoppable technology?

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What do we mean when we talk about shoppable tech? It’s technology that enables you to shop through tech in a more frictionless way – think AI Assistants like Siri, Alexa and Google Home, making purchases directly from a video and Instagram posts with tags taking users directly to checkout.

Traditionally, the sales process for FMCG has been largely left to retailers. But Amazon’s dominance is changing that. If there is anything that Amazon pushes, it’s convenience and it’s manufactured this convenience through shoppable technology to make it even easier for consumers to purchase products from Amazon – think the Echo Home or Amazon Spark. The competitive battleground looks like it’s shifting slightly from the store to the home – and Amazon has taken on the role of gatekeeper.

FMCG brands need to invest in their own digital shopfronts. This isn’t just about generating sales through setting up online shops. The focus for brands should be on using shoppable technology to capture and convert their own traffic.

Amazon has plans to own logistics, from the planes it has hired, to the drones that will predict when you will order certain products, so that delivery can be near instant. FMCG brands will have to compete with consumer expectations that are driven by Amazon’s crazily efficient experience.

Most FMCG brands are in the early stages of direct-to-consumer offerings – although things are picking up. However, brands will have to ensure they are actually adding value for the shopper and giving them a real reason to visit and spend money. There’s a real opportunity for FMCG brands to prove that defeat at the hands of Amazon isn’t a foregone conclusion and that they can become real power players in the purchasing journey – by beating Amazon at its own game.

Nicola McAdam

Posted June 14, 2018