Out of the Ring: How Retailers Can Make Amazon a Frenemy
If you’re a boxing fan, watching Wal-Mart and Amazon.com trade punches over shipping in the last several weeks has been interesting. To smaller retailers, both giants appear to have every advantage. They might even find it refreshing to see them duke it out for a change, considering the vast majority of retailers feel like both Amazon and Wal-Mart have them on the ropes.
To consumers, Amazon is a low-price, one-stop online shop. For retailers, it’s their biggest rival. Amazon, which began as an online bookseller, is now an e-commerce giant that many omnichannel merchants say is threatening the success of their business.
For e-commerce retailers, Wal-Mart often wins with lower prices. However, Amazon offers more than lower prices. It has exclusive access to shoppers. Many retailers sell their products on Amazon because they feel they don’t have any other choice. Amazon also has shoppers engaged: Forrester estimates 55 percent of consumers use Amazon for product research. Many retailers worry they’ll miss out if they don’t have a presence on the online marketplace.
While Amazon and Wal-Mart continue their battle, let’s ponder the possibility that now might be the perfect time for smaller retailers to leverage their own competitive differentiators to turn Amazon from a rival into a "frenemy."
Here are a few approaches you could take:
1. Offer a connection to your brand and a deal for the shopper.
Get creative about reaching customers who purchase items you list on Amazon. Prepare and ship your own orders to maintain control of the experience they have with your brand.
One Bronto client connected with its customers by adding a simple card with a landing page URL to its Amazon shipments. Customers who visited the page could sign up for email updates in exchange for a one-time discount for purchases on the brand’s website.
If you use this approach, be sure to add a welcome series for new subscribers who come to your site via that landing page. Then, segment those customers for future communications. Conduct A/B tests on your messaging, and experiment with special offers that would be attractive to customers who came to you via Amazon. If you find they’re more motivated by lower prices, for example, create regular communication with that segment about overstocked inventory or flash sales.
2. Personalize your communication.
Amazon isn’t known for great communication with its customers, so smaller omnichannel merchants can really shine with personalized messaging. Start by using your marketing automation platform to segment customers based on their shopping behaviors.
Tarte Cosmetics segments contacts and builds triggered campaigns to capture the most relevant audience for each message. It also offers unique discount codes for customers’ birthdays. If there’s something that might be of interest to its customers, Tarte’s Digital Marketing Director Stephanie Urban will work it into an email.
“Even if we're having a sitewide sale, we might send a shopper an email about mascara because we know she bought that in the past," Urban notes. "She’s much more likely to open if you’re speaking to her directly rather than just bulk-mailing promotional information.”
3. Price products strategically.
Amazon got its start by offering lower prices on books than brick-and-mortar bookstores. Wal-Mart took a similar approach, pricing lower on staples, such as milk and bread, and stocking them around the perimeter of the store, leading shoppers to believe that prices on other items were lower, too.
Here’s a more customer-centric approach: Reserve your best pricing and promotions on the items most frequently searched for on your website. Use your marketing automation platform to personalize recommendations so you control the products that are offered in messages to customers. For example, limit recommendations to your highest-margin products or overstocked inventory.
If you’re really frustrated with Amazon, you always can pull your inventory. That’s what Birkenstock did when it stopped selling its shoes and sandals on Amazon in January in response to a growing number of counterfeit versions of its products and unauthorized sellers on the site.
Or you can best Amazon using your greatest strengths. Amazon achieved its success by introducing consumers to the convenience of online shopping, and all retailers benefit from that. You can delight customers with personalized communication, promotions on the items they love, and just-in-time messages that show them that your brand understands their needs and values their business. Take the time to connect with your customers about what really matters to them. Your efforts are sure to get your brand noticed, and you’re likely to deliver a few left hooks to your competitors.
Nanette George is the senior product marketing manager of Bronto Software, a commerce marketing automation provider.