By Doug Gurr, UK Country Manager, Amazon
RETAIL is not a zero-sum game between the high street and online. Retailers large and small are realising that customers want both, with physical retail – which is 82 per cent of UK shopping by value – and e-commerce working hand-in-hand to drive growth. Customer behaviour has to be the starting point for any debate about the future of retail. That may sound simple, but it’s something that too often gets lost. Customers want – and will always want –convenience, choice and competitive prices.
For hundreds of years, retailers have pioneered new experiences to offer customers exactly that. Think of Mr Woolworth’s “radical” idea to put products on shelves that customers could browse. This helped customers explore a broad selection in a convenient way, reducing the need for clerks and making it hard for others to compete.
It is customers who drive the change they want to see. We could legislate against Woolworth’s or shopping malls or the internet, but customers wouldn’t benefit and innovation would stagnate.
Over the years, we have adapted our approach at Amazon in order to put customer needs first. Nearly 20 years ago we made the controversial decision to allow other retailers, predominantly up-and-coming small businesses, to sell their products alongside our own.
In 2000, three per cent of physical gross merchandise sales on Amazon came from independent third-party businesses. By 2018, this had increased to 58 per cent, following years of heavy investment in technology, infrastructure and selling tools to help sellers grow their business. Currently, more than 10,000 Scottish brands reach customers and build their businesses on Amazon, reaching millions of potential customers across the world. Tens of thousands of British small businesses now sell their products on Amazon’s global sites, helping to support 80,000 UK jobs and achieving more than £2.5bn in export sales in 2018.
The internet has enabled start-ups and smaller brands across the world to launch products and reach out far beyond their shop window, without the need for heavy capital investment. And as customer preference becomes undeniably omni-channel, many of these small online businesses recognise the benefits in having both a physical and digital presence.
Take Shearer Candles, a 120-year-old family business, and Assai Records, which sells vinyl records in Edinburgh and Dundee. Both have been able to expand the number of their physical shops as a result of increasing profits from building successful online businesses. Small retailers such as these realise that online and offline aren’t mutually exclusive.
Many small online businesses are now looking to physical retail as a place to expand their customer base. That is why have launched Clicks and Mortar – a new programme where Enterprise Nation and Amazon will enable up and coming online brands to experience high street retail for the first time. Our first Scottish store is opening tomorrow in Edinburgh’s Waverley Mall and will enable more than 20 online brands from across Scotland and the UK with the chance to meet customers, test new products and experience selling on the high street in an affordable way. It forms part of a year-long pilot programme that will explore a new model to help up-and-coming online brands grow their high street presence.
If we are serious about bolstering retail in Scotland and across the UK, we need to work together with a focus on customers’ needs.
Clicks and Mortar aims to demonstrate that for growing brands, the future of retail is not a competition between the high street and online. Customers have chosen both.
By embracing this simple fact, and by focusing on customer needs first, retailers of all sizes can continue to succeed and grow for the long-term.
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