Amazon is an e-commerce powerhouse, but it’s not strong in every area. Here are some of its key weaknesses and a strategy competitors can use to win business away from the e-retail giant.

Bob Gaito, CEO, 4Cite

Bob Gaito, CEO, 4Cite

Amazon just hit $1 trillion in market value, reflecting the retailer’s skyrocketing success as a disruptive force of commerce.  To other retailers, they can seem like a conquering army, rampantly seizing territory as they march through the retail terrain.

Starting as a bookseller, they quickly expanded to offer practically everything—now even groceries.  They’ve also set the standard for quick and painless ordering and delivery, and are finding ways to improve the consumer experience at every turn (ordering with Alexa or Amazon buttons, for example).  Amazon Prime has been so successful that members barely batted an eye at a 20% price increase that now generates hundreds of millions of dollars in extra revenue per year.

Unfortunately, you don’t get to slay the giant in this story—there is no magical slingshot that will bring it down.  But, Amazon is not all-powerful.  There are plenty of chinks in its armor that give other retailers the opportunity to defend themselves and expand their own territory.

Amazon falls short when it comes to specialty clothing for petite, plus-size, and tall consumers.

Fashion Not Forward

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Amazon is not a destination for fashion.  In a recent Morgan Stanley survey, when asked the top reason for purchasing clothes on Amazon, only 6% chose “Amazon offers fashionable clothing and brands I like.”  People go there for the basics, with true fashionistas found elsewhere.  Likewise, luxury items are not Amazon’s strength, with a marketplace model that undermines the kinds of strict control that are key to maintaining a sense of exclusivity and keeping prices high.

No Thanks to Counterfeits

Many consumers have concerns about the authenticity of Amazon purchases and brands are also sounding alarms, with some even accusing Amazon of being complicit with counterfeiting.  Amazon 3P, or third-party marketplace, lets merchants sell items in a relatively unregulated environment. Their listings show up right next to 1P listings [items sold by Amazon], leaving little differentiation between verified listings and counterfeit goods.  Even if Amazon removes the counterfeits, brands can be plagued by bad reviews about poor quality that remain stuck on their listings indefinitely.

Not my Size

Amazon falls short when it comes to specialty clothing for petite, plus-size, and tall consumers, who tend to be more discerning in the clothes they buy.  They’ve had bad experiences with the fit of generic, off-the-rack garments, and tend to find brands that specialize in their sizes and buy direct.

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No Surrender in Europe

Clearly in Europe, Amazon is not taking over the world.  While they control 35% of online apparel and footwear sales in the U.S., in Europe they control only 8%.  At 10%, Berlin’s Zalando is Western Europe’s top online apparel and footwear company.  Their success is largely attributed to a partnership program that enables top fashion brands such as Adidas and Tommy Hilfiger to access data on what shoppers are buying.  Similar partnership programs enabling retailers to share data in mutually beneficial ways are starting to gain traction in the US as well.

Dancing with the Devil

Many merchants see Amazon as a necessary evil.  They’re willing to sell some products on the platform, but have qualms about the price they pay in thin margins, lost access to their customers and possible counterfeits.  Amazon forces them to sell at lower prices than their own sites by giving them no way to distinguish themselves (other than price).  Despite Amazon’s skyrocketing success, it makes you wonder if it’s really sustainable to operate a platform where many of the participants don’t really want to be there.  More and more are exploring partnerships and other options, such as alternatives to Amazon Prime like Shoprunner, designed to push back against Amazon’s offensive.

No Surrender in Europe

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Clearly in Europe, Amazon is not taking over the world.  While they control 35% of online apparel and footwear sales in the US, in Europe they control only 8%.  At 10%, Berlin’s Zalando is Western Europe’s top online apparel and footwear company. Their success is largely attributed to a partnership program that enables top fashion brands such as Adidas and Tommy Hilfiger to access data on what shoppers are buying.  Similar partnership programs enabling retailers to share data in mutually beneficial ways are starting to gain traction in the US as well.

Dancing with the Devil

Many merchants see Amazon as a necessary evil.  They’re willing to sell some products on the platform, but have qualms about the price they pay in thin margins, lost access to their customers and possible counterfeits.  Amazon forces them to sell at lower prices than their own sites by giving them no way to distinguish themselves (other than price).  Despite Amazon’s skyrocketing success, it makes you wonder if it’s really sustainable to operate a platform where many of the participants don’t really want to be there.  More and more are exploring partnerships and other options, such as alternatives to Amazon Prime like Shoprunner, designed to push back against Amazon’s offensive.

Fight Fire with Fire

Amazon doesn’t keep their secret to success a secret.  Their credo is to be earth’s most customer-centric company.  To fight fire with fire, retailers need to personalize everythingby knowing what each individual shopper wants.  Today’s shoppers are distracted and don’t have time to sift through broadcasted messages, and get frustrated by irrelevant messages.  Instead, focus on sending personalized offerings based on their data-driven interests. The key is to identify shoppers the moment they land on your website, and then collect the kinds of data you need to get them the right messages, through the right channel, that will keep them engaged and coming back for more.

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Like Amazon, you should be making personalized recommendations in real-time, based on a shoppers’ past and current interests, combined with browse and purchase data from shoppers with similar interests.  You should also go the extra mile and use this data to make real-time personalized offers unique to each customer, and to display social proof stats that build shopper confidence in a product of interest (i.e. 22 shoppers are looking at this product right now).

With these live content tools in your arsenal, you can better stand your ground against Amazon.  And, if you decide to join a retail partnership that pools data on shopping interests, you can get even better results from your live content offerings.

Amazon weaknesses4Cite provides technology for personalizing email and website interactions with consumers.