With the U.S. retail giant's recent announcement of the global launch of Amazon Connect - industry experts left wondering what outcome to expect
The level of industry disruption coming from Amazon places the company in a class all its own. From media company to tablet producer to contact centre solutions provider. Amazon is a multi-dimensional business disruptor. With Amazon Web Services (AWS) now offering contact centre solutions, the question begs, how will the industry cope and what impact will AWS have on the region if any?
In a March 28 release, Amazon announced “Amazon Connect, a self-service, cloud-based contact center service that makes it easy for any business to deliver better customer service at lower cost. Amazon Connect is based on the same contact center technology used by Amazon customer service associates around the world to power millions of customer conversations.”
The company also further sweetened the offer as follows, “There are no up-front payments or long-term commitments and no infrastructure to manage with Amazon Connect; customers pay by the minute for Amazon Connect usage plus any associated telephony services.” You can find the Amazon press release here for more details.
What could this mean for Australian Contact Centres and technology providers?
Let’s first take a look at retail, which can provide a sobering look at Amazon’s success. Recently, CommBank released its quarterly report on the state of the retail industry in Australia with research conducted by ACA Research. According to the report, 30 per cent of Australian retailers are unaware that Amazon plans to enter the Australian market, and of those that are aware, only 14 per cent have a plan in place to effectively compete. Only 11 per cent of Australian retailers see Amazon as a significant threat.
A recent conversation I had with a long time industry expert closely connected to the supplier side of the industry confirmed my concerns that, like the retail industry, the contact centre world may not be prepared for Amazon. A level of complacency does seem evident. Let’s consider for a moment Amazon's U.S. retail sales numbers.
According to a study by Slice Intelligence released in February of this year and published in Business Insider, Amazon accounted for 43% of online sales in the US in 2016, up from 33% the year before and that share continues its upward trend. Now consider that U.S. consumers were forecast to spend $385 billion USD online in 2016 and that number is expected to grow to $632 billion by 2020. I think I’m painting the right picture now. If we’ve learned anything in business since the introduction and continued evolution of e-commerce, the smartphone and prolific roll-out of mobile apps, is that every industry, no matter how small or big, should expect to be disrupted. Should Amazon put its marketing weight behind its AWS platform, we should therefore expect to see a shift. Exactly how much of a shift remains to be seen.
Having a plan in place is the key to survival in today’s topsy turvy world of business. Exactly what the outcome will be and to what degree contact centre operations will shift or be disrupted in Australia will surely become clearer over the next several months as Fifth Quadrant, prepares and launches its annual Contact Centre Benchmarking Study. Our team will continue monitoring the contact centre world in Australia and New Zealand and will publish more in the coming weeks and months.