How this brand is tackling the Amazon retail problem

Many Australian brands are struggling to comprehend the impact Amazon's arrival in Australia could have on sales. This manufacturer has already been there and lived to tell the tale

Ethan Nyholm
Ethan Nyholm


While many Australian brands struggle with what impact Amazon’s arrival in Australia might have on their sales channel, at least one has had first-hand experience with the American online behemoth for years.

STM Goods has been designing and manufacturing bags, cases and other accessories for high-tech goods such as laptops, phones and tablets since 1998, and now works with 3000 retailers globally. One of them just happens to be Amazon.

Founder and global CEO, Ethan Nyholm, has some blunt advice for other manufacturers in the age of Amazon.

“It’s putting higher demands on everyone within the channel, and if you are not going to do a better job, then someone else will,” he says. “There will be another company with another product that will go to that next level and try to be that partner of choice. So you really need to change, modify, and improve almost all aspects of your business.

“We like to think we are a little bit ahead of the game because we try to do these things already. We deal with Amazon globally, so we are well versed in that language.”

What it takes to partner with Amazon

For STM Goods, meeting that challenge has meant constantly raising standards in terms of customer service, product quality and speed of delivery. It has also meant adjusting how it organises its sales channel.

“When you are working with a retailer, you are initially selling to a buyer, so your initial point is to a single person,” Nyholm says. “That same message has to be able to flow through packaging and through other communication directly to the end user, so that they pick your product off the shelf and buy it.

“With Amazon, you are constantly selling to an end user, so the feedback loops are a lot quicker. The information you receive and the requirement to be good at what you do is a lot higher.

“Just getting it listed isn’t good enough. You have to also communicate against all those other players that are essentially on that shelf as well, and really the barriers to getting on that shelf are very minimal.”

When selling through the marketplace, Nyholm says STM Goods works to ensure its rating is as high as possible, so it lands in front of would-be consumers.

“The amount of information the consumer looks for and consumes online is a lot greater than what they demand in the retail store, because there they able to touch and feel it,” he continues. “Trying to provide that information, whether is detailed specs, information about the materials we use, video – just trying to provide a lot more information than what we could in a normal retail setting – seems to help.

“From a customer support perspective, we’re there. When people have issues, we address them. We try and answer questions, we try and make sure our star reviews are up.”

STM Goods also pays for Amazon A+ Content, which offers enhanced content to first-party sellers, such as highly-detailed item descriptions, improved images, comparison charts, videos and other benefits.

“It gives the consumer more of a brand experience on that product page,” Nyholm says.

Co-opetition

As well as its retail partners, STM Goods sells direct to the public through its own website. But selling through Amazon also potentially puts STM Goods in competition with its own channel on the same marketplace platform. Nyholm is pragmatic about the situation.

“We sell through multiple channels, so in theory a retailer could have our products on the marketplace the same way we do,” he says. “Inevitably, we sometimes compete with them, but that is just the nature of the beast.

“It seems like the trends in the US are a little bit ahead of what we are finding in Australia, so we picked up that marketplace aspect of what we do a little bit earlier, and have tried to manage it to the degree that we can.”

One of the most critical adjustments STM Goods has made is to its speed of fulfilment. This is something Amazon has used to capture the imagination of consumers, through services such as Amazon Prime Now, which offers two-hour delivery of household items and essentials in some markets.

Nyholm says this reflects the general expectations of consumers today for instantaneous response.

“You see that across the board – someone sends you an email, they expect a response right away,” he says. “What’s reflected in retail is what is being reflected in society. It absolutely has made the requirement for us to forecast, deliver, and make sure we have the right product in the right place at the right time extremely important, and changed our logistics completely.”

The technology component

One of the critical factors that has enabled STM Goods to keep moving forward has been the quality of its back-end systems, based around NetSuite.

“One of our key objectives when we put this system in place was to provide visibility, because the velocity of business and the velocity of change in what we are doing requires a greater global understanding of what was going on in individual locations,” Nyholm says. “NetSuite helps provide a global view of everything that is going on, and allows people in the US to understand what is coming through from a production perspective.

“It is about making sure that the right product is in the right place at the right time at the right price.”

But success for this objective is about more than just technology. Nyholm says there must also be a genuine willingness to share information across the business.

“There is a change in the frame of mind of what people need to have access to,” Nyholm says. “It is not good enough to know just what you have in stock in one place. You need to see what you have in stock everywhere, and when the next lot is coming, and how quickly they can get it.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu    

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Data has the power to build or burn brands

A brand can be severely wounded by use or misuse of any of its assets and you could say data has the greatest power of all to inflict damage.

Lucy Acheson

Head of data strategy and customer experience, LIDA

Totto and your inorganic future

At Cannes Lions this year we’ve been treated to many artificial intelligence (AI) insights. It’s one of the major discourses of our time.

Richard Brett

CEO, opr

Personas of one and the rise of ‘always there’ marketing

I’ve got some bad news. The ‘always on’ marketing approach that many companies have only just fully implemented is already out of date.

Nigel Roberts

Founding partner and strategy lead, Yell

E-mail automation is a wonderful thing, especially for digital marketing. It's interesting to see how these tools are becoming more and m...

Claudia Evans

How email marketing automation is helping this Aussie electrical wholesaler enter the digital age

Read more

Machine learning represents the future for digital marketing. I'm glad that there are strides being made in this direction and that even ...

Claudia Evans

Looker eyes benefits of machine learning to connect with customers

Read more

I read you post full. It's really good .

Yusuf

Salesforce ups the Marketing Cloud ante with Datorama acquisition

Read more

Promotion is difficult. You should be able to do it. Sometimes it turns out bad, and when you turn to professionals, it turns out well - ...

Jordan Samuil

Village Roadshow partners with Lion for pourage rights and promotional partnership

Read more

This is very good news for Australian SMEs as ActiveCampaign is an very powerful marketing automation / email marketing tool that costs a...

Lawrence

SMB marketing automation provider sets up Asia Pac HQ in Sydney

Read more

Latest Podcast

More podcasts

Sign in