The Amazon Effect: Ride the River or Fight It?

The frank Agency Branding
Winter 2018
The-Amazon-Effect-Ride-the-River-or-Fight-It

Amazon has long been called a disruptor, but it wasn’t until this past year that this disruption hit home in the dental sphere.

In December of 2017, analyst Steve Beuchaw announced that Amazon had begun acquiring certain dental equipment and supply products with the intention of selling them via the Amazon Business platform. The result was a rapid drop in a few distributors’ market shares, along with a resounding question – what will the long-term effects be?

While Amazon’s intrusion is a first in the dental arena, it has been making waves in the medical industry for the past few years already. And, because of the tendency of the dental industry to follow medical, we can examine some of the effects that Amazon Business has had on the medical supply chain to understand more of what the future could look like for dental manufacturers and distributors.

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The Distribution Changeover

When Amazon Business opened in 2015, medical supplies were among the first to be seen on the platform. As could be expected, Amazon’s sales caused a downward pressure on prices industry-wide, which resulted in slimmer margins for some large distributors.

Cutting distributors out of the picture will have much the same effect in the dental industry – causing strain as manufacturers and distributors alike are pressured to lower their prices to compete with online vendors. However, manufacturers and distributors aren’t the only players who lose out in this model.

Dentists will have less access to distributor sales teams, who are often the ones to deliver ongoing support for products, as well as consultations to help dentists find the best solutions for their practices.

But therein lies the advantage that distributors and manufacturers have over Amazon Business – and the main point to capitalize on as we see this shift unfold.

Playing Off Strengths and Adapting to Changes

While direct sales through an ecommerce avenue are appealing from a price standpoint, this model leaves dentists with less access to consultations and professional advice from sales teams. If your team is providing indispensable service and value, this will be a significant deterrant for those clients that make use of your expertise.

Your first step to maintaining balance during this shift will be bolstering your sales force. If they’re not industry experts who provide true value for your customers beyond merely touting your product offerings, you stand to lose out to Amazon and other up-and-coming ecommerce players. However, by offering partnership in addition to products, you become a key to practice advancement – and an essential member of each practice’s team.

Your sales team can even bridge the gap by providing and distilling online resources for their customers. B2B buyers review massive amounts of internet resources before they make their purchases (according to Demand Gen Report’s B2B Buyer Behavior Survey), especially where complicated equipment is involved. By sharing important information, whether through blog posts or in a one-on-one setting, your sales team can offer those resources that are so critical for buyers to see before making their decision.

Another way to adapt to the direct sales shift will be to employ your own ecommerce options. With a strong sales team and an online sales method, you can appeal to a wider swath of your target audience: those who prefer the personal consultation of a sales rep, and those who tend to make their purchasing decisions independently.

Yet, beyond changing your sales approach, staying relevant and competitive will also require a change in your marketing strategy.

BUILD UP YOUR SALES FORCE INTO INDUSTRY EXPERTS WHO CAN PROVIDE LONG-TERM VALUE — NOT JUST PRODUCTS.

Amping Up Your Strategy

Even if your sales team is an outstanding asset, or your ecommerce platform is expansive, neither of these will help you make headway if they’re not supported by robust marketing tactics.

This begins by having a recognizable brand. If your images and tone both echo the same cohesive message, each piece of marketing you create will reinforce your brand at every level and throughout every channel.

Social media needs to be an integral part of your marketing strategy as well, especially as nearly 40% of all practicing dentists are under the age of 44 (according to the ADA) – and therefore likely to be present on the main social media outlets. By using both organic and paid social strategies with focused targeting parameters, you boost engagement and brand awareness while reaching this audience more effectively.

For the manufacturers who choose to build up their ecommerce presence, marketing via retargeting ads will be an absolute must. These allow your brand and products to stay top-of-mind, nurturing leads further into the sales funnel. As your customers are constantly bombarded with marketing messages from a variety of sources, you need to ensure that your messages are seen and make an impact.

Crafting a Plan for Success

Though Amazon very well may disrupt the dental supply industry, according to Barron's, it’s projected by some that this can’t occur unless a large distributor is first acquired. Until that point, as the adage goes, the best defense is a good offense.

Build up your commitment to providing the absolute best in service and value to practitioners, and center your marketing and sales tactics around this common goal. In this way, you’ll more than meet the challenge that Amazon poses – you’ll withstand it.

AMAZON HAS STEPPED INTO THE DENTAL RING.
MEET THE CHALLENGE THROUGH STRONG SALES AND
MARKETING TACTICS THAT CENTER ON PROVIDING
CUSTOMER SOLUTIONS WITH LASTING ROI.

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