Big brands told to think like startups

Established companies should embrace customer-first focus to survive the ‘Amazon effect’

Online shopping sales in Canada will more than double in the next few years, so established brands need to “hit the reset button” with a customer-first approach to ensure survival, says the country manager for Amazon Canada.

“So many larger brands are starting to realize that what led to success in the past — or what led to success offline — just won't automatically transfer and extend online,” Tamir Bar-Haim said in an interview.

“In a world where customers have so much choice, it's going to be convenience and great experiences that win out,” he noted ahead of his keynote speech Wednesday at the Dx3 digital marketing convention in Toronto.

He pointed to data from e-Marketer which projects that e-commerce sales in Canada will grow from $32 billion in 2017 to $71 billion in 2021, representing 66 per cent of retail growth in Canada.

“The annualized growth in each of those years is higher than what Canadians spend on a given year in beer. It's quite significant,” he said.

Canadian consumers have been slower to adopt online shopping than those in the U.S., the U.K., and other countries. But a major disruption is now underway as retailers are feeling the so-called “Amazon effect,” forcing them to invest in digital and meet consumer demands for better e-commerce experiences, according to an e-Marketer report.

The e-commerce giant has evolved in Canada over the last decade from a site that just sold books and DVDs to 8,000 full-time employees and offering free same-day delivery for Prime subscription members in Toronto and Vancouver. In the last few months alone, the company has launched Alexa and Echo devices, Fire tablets and Prime music and joined the aggressive push in the U.S. into online grocery retail with the takeover of Whole Foods.

“It feels like that big wave is still yet to come here, which is really exciting,” said Richmond Hill-raised Bar-Haim. He recommends companies put themselves in the shoes of a “small, scrappy” upstart competitor and figure out how to raise the bar servicing customers within their industry.

“One of the questions I get asked a lot is ‘what is the secret sauce at Amazon,’ and it’s customer obsession. It's simple but it's also really hard to replicate.

“There are a number of ways to centre and focus a business. For us, the most effective focus is an obsessive focus on the customer and we're relentless in our pursuit of keeping and earning customer trust,” said Bar-Haim, who worked for a few years at Amazon’s Seattle-based headquarters.

Though he says bricks-and-mortar retail stores aren’t going away, he thinks brands “need to recognize e-commerce is fundamentally different” since shelf space is effectively free and limitless, so barriers to entry are lower. “We don’t make money when we sell things, we make money when we help customers make purchase decisions,” he noted.

The way to building a more customerobsessed business, he says, is to recognize “the value of leading with insights, creating moments, delighting customers through great experiences and optimizing for convenience as well.” Though he would not comment on Toronto making the shortlist of 20 prospective cities that Amazon is considering for its second official headquarters, or HQ2, Bar-Haim said the shopping behemoth is happy where it stands in Canada today.

“Amazon is really excited to be in Toronto. We're going to continue to invest here,” he said, adding the company is looking to hire 70 more people now to add to the 700 already employed in the city.