A cute robot-esque figure made out of Amazon boxes standing on a tree branch.
Tuesday, February 1, 2022
Written by:
Digital Boutique

How to take on Amazon

3 minutes

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Amazon wrote the book on ecommerce. The company takes 41 cents of every dollar spent online in the US and 27 pence from every pound in the UK. The good news? That dominance isn’t impenetrable; there are still opportunities to compete with ecom’s very own Goliath.

Amazon dominates the US ecommerce market with 40.4% of online sales, which accounts for 5% of all retail sales. It also takes 27% of UK online market share.

Offer feel-good shopping

For some, ethical and sustainability concerns are a persuasive reason not to shop with Amazon. This group is actively looking for alternatives and just needs reassurance these alternatives represent a more socially-conscious choice. Earn their custom by making sure any environmental and ethical credentials – from UK-made goods to efficient delivery routes and recyclable packaging – are clearly communicated across your site.

Go premium with gift cards

Amazon Gift Cards have become a go-to for everything from birthday and Christmas gifts to competition prizes and survey incentives. But their flexibility is also a limitation - the gift you can buy for anyone quickly becomes more functional than thoughtful.

Elevate your gift card experience above Amazon’s one-size-fits-all solution with a bonus gift or, if you have physical stores, a VIP experience for gift card holders. Combine this with Amazonesque levels of convenience – such as card design options, post or print formats and the ability to redeem in-store or offline  – to establish a premium gifting option your audience will love. 

If you want to take gifting to a new level, check out www.giftnow.com.

Leverage your omnichannel offer

Even a global pandemic couldn’t bring in-store retail to a standstill. It’s faster than buying online. It’s more personal. Sometimes the lack of delivery fees makes it cheaper. Sometimes it’s just more fun.

Amazon doesn’t yet have a meaningful physical presence in the UK, so can’t compete with brands that offer a customer-centred omnichannel experience. We've already seen this in the US where, in 2020, Walmart’s online sales were growing twice as fast as Amazon’s. Create an engaging in-store experience and you’ll be meeting your customers’ needs in a way Amazon won’t be able to do for years. 

Sell the value

Amazon’s low overheads and economies of scale mean they can drive prices far below what’s profitable for any other business. Competing on price is a race to the bottom – and you’ll crash land long before Amazon does. 

Instead, you need to show audiences why buying from you is a superior experience. Make it clear you’re aligned with your customers’ values or personal style. Offer a discount or free gift with each first order. And deliver a level of service so premium, your audience feels the benefit of paying a little more.

Stay true to your audience

Amazon’s dominance is strongest in the US. Beyond this, region-specific experiences are an effective way to gain traction. For example, Singapore-based Shoppee which overtook Amazon in app install rankings in 2021 used a nuanced understanding of its Southeast Asian and Latin American audiences to establish itself as the store of choice for millions.

Look for areas to excel

Amazon is the gold standard in many aspects of ecom. But vast numbers of customers and products can also be its biggest weakness. This allows other retailers to gain a competitive advantage by excelling in areas Amazon doesn’t: multi-channel experiences, product customisation, unboxing experiences or ethical and eco-conscious shopping. 

Through this tailored and targeted approach, you’ll create a superior experience that earns repeat custom and brand loyalty.

Provide rich product content

Consumers increasingly want to see videos and detailed product imagery before they commit to an online purchase. Amazon is making moves in this area but with so many products to update, they’re unlikely to achieve the consistent experience consumers expect any time soon. This presents a crucial window of opportunity for smaller retailers who can adapt more quickly.

Become an online destination

Even the most dedicated Amazon customer has a purely transactional relationship with the brand. The site offers little in the way of lifestyle, inspiration or engaging content. This is a clear opportunity. 

Ecommerce is becoming more experiential. Customers don’t just want to shop, they want to be entertained and engaged while they do it – to see the best elements of the in-store shopping experience translated onto a screen. Create this wow for your customers and give your audience a reason to pick you.

Offer one-click checkout

Amazon’s dominance comes from its unwavering focus on convenience, not least one-click checkout. By removing every trace of friction from the checkout flow, they allow users to shop on the go, without a payment card and with no need to enter their details – all dynamite for increasing conversions and reducing abandoned baskets.

It’s compelling, but not unique – you can compete like-for-like using a platform such as Fast. This leverages a collective database which they tokenise, allowing users to input their details in one place and use them across multiple sites.

Offer free and fast delivery

Amazon’s rapid checkout with the ability to deliver almost any product quickly and  affordably has moved the goalposts for retailers everywhere.

You don't necessarily need to match Amazon's convenience-led model. But you do need to acknowledge your audience's expectations. Be transparent about when items will be dispatched, how long delivery will take and how much it will cost. Include all of this on the product detail page so your customers know it upfront – often it’s not the wait customers dislike as much as the uncertainty.

Think long term

Disrupting Amazon’s dominance requires you to shift your focus to earning loyal customers rather than winning one-off sales. This comes with a need for investment – from which you may not see returns over the usual 6-12 months. However, over a longer period improvements in customer lifetime value (CLV), cost of acquisition and other powerful long-term metrics will vindicate the outlays.

Read the blog: Why your FD hates free delivery (and why you should probably do it anyway)

Tailor payments to your location and audience

Shoppers want to check out in their local currency, in their native language, using a payment method they trust. Delivering an optimised experience across all three is challenging for a global corporation like Amazon. But – as challenger brands across South East Asia have found to their gain– it’s a persuasive way of winning customers for any retailer that gets it right.

Offer your users more payment options

Amazon is brilliant at payments. But it also has conflicts of interest and an aggressive negotiation strategy that can prevent it from offering some of our favorite payment options. This is your chance to reduce friction where Amazon won’t. Choose Klarna, Alipay, PayPal, Laybuy and Afterpay,  – currently not available on Amazon – to achieve optimum trust and convenience.

Collaborate on click and collect

Amazon hasn’t let its lack of physical stores prevent it from offering UK-wide Click and Collect. In the same way, you don’t need your own national delivery network. Link up with third-party stations like Collect+ to match Amazon’s locker service almost like-for-like. 

Join them

Many retailers have found that the best way to compete with Amazon is to sell their products on the Amazon Marketplace. This allows you to take full advantage of the retailers’ world-class frontend experience and delivery network.

Giving Amazon access to all of your sales data has some downsides (Amazon uses marketplace data to identify which products they should launch – and at what price point) but that doesn’t stop the Amazon Marketplace from being a highly effective and cost-efficient addition to your ecommerce ecosystem.

Want more advice about getting ahead in a competitive market?

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