Kirsten Newbold-Knipp, vice president and chief marketing officer, Convey
Retailers competing with Amazon.com often feel like they’re engaged in a David-and-Goliath battle, with momentum and economies of scale working against them. But new survey data reveals chinks in the ecommerce giant’s armor retailers can exploit to win sales and earn loyalty.
Amazon is nearly irresistible to consumers, and the site’s revenues now account for nearly half of all online retail spending. In a survey of 2,000 US consumers by Convey, 47% of respondents reported doing at least a quarter of their shopping on Amazon—and 23% said they buy more than half of all their goods on the site.
Fast, free shipping is far and away the biggest attraction, chosen by 80% of survey respondents as a reason they shop at Amazon. Four in five participants also reported using Amazon Prime, which awards paid subscribers free one-day delivery on all orders, and which counts more than 150 million members in the U.S.
Amazon has taken unprecedented measures to maintain its fulfillment advantage, including building its own freight and delivery network and banning usage of competing or underperforming carriers for Prime shipments from third-party marketplace sellers during the recent peak holiday season.
As it turns out, that level of investment signals how dependent Amazon is on ruthlessly efficient fulfillment as its sole, if significant, advantage. The survey revealed that without free shipping, 64% of respondents would consider shopping elsewhere—and fully a quarter said they would stop using Amazon altogether.
That’s because, despite their Prime memberships, a significant percentage of survey respondents—especially younger consumers—have reservations about Amazon. Retailers can exploit this ambivalence to their advantage with the following strategies:
Meet The Fulfillment Challenge With Transparency And Proactive Flexibility
Of course, Amazon’s obsession with fulfillment isn’t going anywhere, and it will continue to set the standard. Close to 40% of survey respondents said Amazon’s fast, free shipping made them more likely to expect other retailers to keep up.
While they may be unable to match the scale and breadth of Amazon’s fulfillment resources, retailers of all sizes can be just as transparent about shipping costs and timelines. Communicating options up-front is important; more than 50% of shoppers in Convey’s annual consumer study said they want to see a guaranteed delivery data at checkout. Integrating carrier data at the product level enables merchants to display this information early and often.
Shoppers also expect communication during the delivery process, with more than 87% saying they want a proactive notification via email or text message if a shipment is running late, Convey’s consumer study found. But just 18% of shoppers in the latest survey say Amazon’s delivery communication is a reason to shop there—potentially giving a leg up to retailers with the ability to proactively manage shipments and notifications.
Slow and Sustainable (May) Win The Race
Shoppers are of two minds about sustainability. Some 27% of shoppers in Convey’s survey said they feel negative about Amazon’s impact on the environment—especially Millennials, whose disapproval of Amazon’s ecological footprint was 50% higher than average. But that concern so far hasn’t changed behavior: a quarter of shoppers who believe Amazon is damaging to the environment still buy at least 50% of all their goods on the site.
Retailers can appeal to this ambivalence by displaying their sustainability bona fides when it comes to sourcing and manufacturing; product page details can highlight the origins of materials and ingredients, on-site search can enable filtering for sustainable attributes, and social media campaigns can reach young influencers receptive to sustainability messaging.
When it comes to fulfillment, retailers can promote the ecological benefits of “free” over “fast”: more than 79% of Amazon shoppers—even including Prime members—said they’d be willing to wait up to 7 days for free shipments, giving retailers a window of tolerance for slower shipping speed, especially when throttling back benefits the environment.
Highlight the Unique And Homegrown
Amazon’s competitive threat to other brands is another reason shoppers are ambivalent. One in four say Amazon has had a negative impact on the retail industry overall—although, as with environmental damage, this concern hasn’t stopped shoppers from using the site.
More substantially, shoppers recognize Amazon’s limitations as a shopping source. Although they give the site high marks for breadth of selection, with 69% saying it’s a reason they use the site, just 22% say they use it to find unique, vintage, or hard-to-find items, Convey’s survey found. But the ability to find exclusive or eclectic items is a key reason consumers shop on the Web, with retailers’ growing capabilities for mass customization creating still more appeal.
Furthermore, Amazon is facing increasing scrutiny over counterfeit items sold through its third-party marketplace, with the federal Government Accountability Office finding that more than 40% of goods purchased through online marketplaces as part of a 2018 study were fakes. Retailers can make headway by showcasing certifications and authenticity guarantees as well as eclectic product assortments.
Agile brands can sustain growth in an Amazon world
Amazon’s combination of convenience, selection, and free shipping may seem unbeatable. But by fulfilling shoppers’ needs for delivery transparency and flexibility, and capitalizing on key gaps in Amazon’s offering when it comes to product quality and selection, retailers can stake their claim to online success.
Convey provides online retailers with technology and services to predict delivery dates, analyze transportation options and communicate with customers.
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