How Brands and Retailers Can Compete in a Digitally Innovative World
For many consumers today, when they think of online shopping, Amazon.com is top of mind. If we come from their perspective, it isn’t difficult to understand why they love Amazon. It's a marketplace that has almost every product imaginable, which, in most cases, can be delivered the very next day. It can't be denied that Amazon oozes convenience and exceptional customer service. Is it any wonder than that, globally, Amazon has attracted over 100 million subscribers to its Prime service?
Amazon has built an unparalleled online shopping platform that can harness customers’ purchasing habits to offer personalized, tailored deals. And its influence on consumer behaviors continues to grow. Customers today judge their experience with companies right from first awareness all the way through purchase and delivery. This is what we’re calling the “Prime Effect.” In fact, our recent study, The Future Shopper, revealed that Amazon has become the preferred starting point for shopping for over two-thirds of U.S. consumers. What’s more, seven in 10 U.S. consumers said they complete the majority of their online purchases on Amazon. Eight in 10 shoppers also revealed they check Amazon reviews and pricing when shopping elsewhere online or in-store, highlighting the level of trust and influence that Amazon holds over consumers today.
Amazon is clearly leading the way when it comes to providing consumers with services that they want. It's no surprise therefore that 85 percent of consumers are more likely to shop with retailers that are digitally innovative. Furthermore, 83 percent wish retailers would be more innovative in how they use digital technology to improve their customer experience. For example, seven in 10 consumers say they would feel comfortable shopping via voice-activated devices (e.g., Amazon’s Alexa or Google Home), emphasizing that the broad base of consumers is looking for new technologically driven retail innovations.
What Should Brands and Retailers Be Doing to Adapt?
It's true that Amazon is increasingly consumers’ site of choice, as it accounts for 52 percent of total online spend in the U.S. However, it's important to remember that some shoppers choose not to use Amazon. We found this was attributed to being able to find cheaper pricing elsewhere, other retailers having more attractive loyalty programs, and the desire for compelling in-store experiences. It’s incredibly beneficial for brands and retailers to understand what it is that Amazon doesn’t do so well — namely, traditional loyalty programs and an exciting brand experience and service. This is the space where brands and retailers can look to sell direct and thrive. As shoppers’ loyalty shifts ever more towards service and delivery, retailers and brands need to ensure that they're asking what shoppers truly want and reflect those high standards in their e-commerce strategy.
Ultimately, retailers and brands need to fish where the fish are. This means having a balanced approach. Retailers and brands looking at selling online need to ensure they're adequately represented across all online channels where shoppers spend their time. This involves continuing to have a presence on online marketplaces, including Amazon; maximizing their reach on retailers’ websites; and creating a brand website that delivers an exceptional and heightened experience for customers. Consumers are becoming increasingly demanding and expect seamless and innovative service. As the retail market only becomes more competitive, it's this type of experience that shoppers will continue to demand on a daily basis.
Frank Kochenash is managing director at Wunderman Commerce North America, a global e-commerce consultancy.
