Amazon in the Netherlands at the end of February: price war and Death By Amazon on the way
Amazon announced January 15 that it will be launching new categories this year, in addition to the books that are now only available on Amazon.nl. Dutch and foreign companies that want to offer their products via Amazon in the Netherlands can now register at services.amazon.nl. The official start seems to come at the end of February.
Amazon Netherlands announcement
“We are very excited to launch a more comprehensive shopping experience on Amazon.nl,” said Alex Ootes, vice president of EU expansion at Amazon. “Selection, value and convenience are key drivers of our retail experience for Amazon customers and Dutch companies play a vital role in delivering them. We are delighted to offer Dutch companies, small and large, the opportunity to sign up to sell on Amazon.nl and reach a wider audience both at home and abroad, increasing the selection for our Dutch customers. ”
“We are excited to take the next step to grow our business in the Netherlands. Today we are announcing that we will be expanding Amazon.nl later this year and offering our Dutch customers a larger and wider selection of products,” said Roeland Donker, Country Manager Benelux. “We're just getting started, but we're optimistic that over time we'll build on the trust of customers in the Netherlands by focusing on the things we think customers value most – low prices, extensive selection and fast delivery .”
Price battle coming
Amazon has been in the Netherlands for several years, first with cloud. In 2013, Amazon Web Services (AWS) opened its first Development Center in The Hague, and an AWS office in 2015. The move this year is focused on e-commerce. Amazon is already one of the top six in the Netherlands in terms of turnover. It made minimal efforts to achieve this: translate the German Amazon site into Dutch, offer Amazon Prime to Dutch people in 2017 and enable iDEAL as payment in 2018.
With this announcement now in 2020 and invitation to selling parties to register, a true price war is to be expected with webshops and retailers. With this official entry, millions of products are introduced on the Dutch market. This concerns categories such as food, clothing, electronics and beauty products.
Price war affects web shops and physical retailers
Generic products are about low prices and availability. Amazon's competitiveness and fame allows the e-commerce giant to win any competition for these types of products. Parents who buy stacks of diapers every month, for example, will be guided in advance by price. Retailers and retailers in particular will therefore feel the arrival of Amazon. In America there has been a term for this for several years: Death by Amazon.
This term was coined by the Bespoke Investment Group in 2012. It tracks an index of 54 retail stocks called the Death by Amazon Index, which the group considers most vulnerable to Amazon. Dramatic yes, macro strategist at Bespoke George Pearkes told The Guardian, but it does represent well what happens in retail land when Amazon comes.
How to Survive Amazon?
Differentiate yourself. Do you sell special niche products in a relatively small market? Then offers Amazon as a sales channel opportunities to reach a much larger target group. For that you give up margin, but you gain business and market. Rather not on Amazon? Then focus on service and added value. Many stores only offer generic items with the distinction of local availability. But when exactly the same product is offered online for half the price, on which buying arguments do you still retain your customers? For years the adage has been: shopping is experiencing. Do you make your customers happy with a cup of coffee and a good conversation? Personal advice that cuts wood? Handy local services that think along with you?
The combination of online and offline, so-called omnichannel, should be fully embraced. So: being able to order, pay and have it delivered at home from the store. Or: order at home and then pick up and pay in the store. If you set that up properly, you have an asset that Amazon can never refute: physical presence.