One of the biggest names dominating eCommerce today is Amazon. It’s nearly impossible to shop for anything without first checking out Amazon. They may not always have the best prices, but without a doubt, they have one of the fastest and most reliable shipping services, not to mention one of the widest range of products around. Their combination of convenience and customer service has allowed them to become a giant in this space. For other retailers selling goods online, Amazon is a big force to have to contend with.
Last year, Amazon accounted for 41 percent of the eCommerce market and an impressive 45 percent over the holiday season, according to Slice Intelligence. Retailers such as Best Buy and Walmart come nowhere close to matching this number, at a mere 2.7 percent market share. Other retailers have also been struggling to compete with Amazon. While the brick-and-mortar landscape is a different story, in the online world, it’s very clear: Amazon is the one dominating e-commerce. But there’s still hope for everyone else.
Turn Amazon’s Weaknesses into Your Strengths
Being the giant that it is, Amazon cannot always handle all of the small details that most retailers can. Here are some tactics to strengthen your website and improve upon areas that Amazon may not be fully capitalizing on.
Bigger and better images: Amazon uses the photos provided in product information sheets. These photos aren’t always high-quality. Take advantage of this and use custom product images that truly showcase the item.
Simplify and reduce clutter: Amazon’s site has a lot of elements competing for attention, and navigating through it all can be difficult at times. A simpler page that customers can get through easily increases the probability of purchase.
Personalization: While Amazon allows customers to create wish lists and save items to their cart, there are some missed opportunities to reduce cart abandonment. Utilize wish lists as opportunities, and implement email marketing tailored to the customer based on saved items .
Vendor retention and satisfaction: Amazon is notorious for questionable practices toward vendors and even using tactics that some call bullying. Build strong relationships with vendors to encourage them to turn to you.
Social media advertising: One avenue Amazon hasn’t pursued is advertising on social media channels such as Facebook. Consider investing in advertising through those networks to develop a new selling channel.
Easy returns: Amazon may be leading the way with fast shipping, but their returns aren’t always as effortless. Differentiate yourself by simplifying return processes and making them as painless as possible for customers. Though it might mean some refunds in the short term, the boost in customer satisfaction could be enough of an offset.
Product descriptions: Similar to the product images, Amazon’s catalog is too massive to write custom product descriptions. Enrich your product listings by focusing on details that matter and writing out item descriptions rather than copying and pasting them from another source.
Beat Amazon at its Own Game
Amazon’s success didn’t just happen overnight—much of their success can be attributed to their effective use of data over time. They are a shining example of how big data can drive business success. Other retailers can achieve similar wins by adopting improved big data capabilities, especially in the following three areas.
Pricing: Trying to price match Amazon is a losing battle. Instead, gather market intelligence to help benchmark your price position against the competition, determine price elasticity, and more. This can then inform your price optimization strategy, and can even help identify opportunities to raise prices without losing sales.
Merchandising: Use internal data to ensure a personal shopping experience by suggesting items to customers based on purchases and viewing history. Optimize assortment by supplementing internal sales data with market intelligence, such as competitor gap/overlap analysis, assortment distribution by category, brand, and price range. Track demand signals to better forecast what to stock and how to manage inventory.
Promotions: Maximize the return on investment for your promotions by incorporating analysis of competitors’ promotional frequency over time, promotional mix, and cadence into your decisions. Deliver compelling promotions by pairing those competitive insights with your own historical promotion data.
According to a study by McKinsey, retailers who have started utilizing big data have experienced a 60 percent increase in business margins and a 1 percent improvement in productivity. Not sure where to start? Wiser offers a variety of solutions to help you make sense of, and most importantly, get results out of big data.
Contributing writer: Matt Chow