The key for retailers to win the war against Amazon is to embrace it
- Fred Killingsworth, the CEO of brand agency Hinge, thinks retailers should stop fighting Amazon, and start embracing it.
- He said that it is hard for even the biggest retailers to compete with Amazon in ecommerce spending.
- Instead, he advocates for an approach that helps retailers leverage all the potential that Amazon has to offer.
If you can't beat them, join them.
That's the drum that Fred Killingsworth is beating as he weighs how retailers can counter the Amazon threat. Killingsworth is the CEO of Hinge, an agency that helps companies manage and grow their brand on Amazon.
"Going on Amazon generates a broader audience and increases your revenue with that," he told Markets Insider. "You can reach a whole other consumer set and deliver that same message of expertise with great content."
Killingsworth was a former Amazon employee tasked with helping the ecommerce giant with strategic international expansion and complex business development. He said that he saw many flailing businesses that did not know the potential of what they could do on Amazon, and so he decided to strike out on his own to help them.
Over 43% of all online purchases begin on Amazon, according to BI Intelligence. Since the consumer is already going on Amazon, Killingsworth said, retailers should be on there to deliver their product and maintain the relationship that the consumer has to their brand.
His approach to leveraging retailers' potential on the platform is to establish, manage, and grow the brand. He helps companies create content standards and develop a brand message and voice that's unique to them. He said that one of the missteps that businesses take is that they do not have a strategy when they put products on Amazon's website. They adopt a set-it and forget-it approach.
He then measures the impact of a retailer's brand strategy by comparing the retailer's sales to similar public brands and products. In the last phase, he focuses on strategic marketing and advertising with Amazon's platform to drive traffic and increase discoverability.
His customers have generated 25% month-over-month growth on average, he said.
The idea that Amazon doesn't have to be the competitor is an especially important one as retailers from grocery stores to pharmacies to big box stores have tried to shore up their defenses from Amazon's encroachment on their turf. Even the biggest brands are having a tough time competing.
Walmart, which has a market cap of $272.7 billion, has spent billions of dollars on ecommerce yet its online sales slipped in its last earnings report. Recently, Albertsons, the second largest US grocery chain, bought Rite Aid as a way to remain competitive against the Amazon-Whole Foods merger.
"How can [retailers] arrive at success with limited resources?" The answer is "they can absolutely coexist," he said.