Three Key Strategies for Competing with Amazon in 2016

March 17, 2016
 

No merchant needs to be told that Amazon continues to dominate online commerce — if anything, its lead over other sellers seems only to be widening. But merchants can compete with the online behemoth by taking advantage of their ability to nimbly demonstrate deep category expertise and build lasting relationships with customers.

Amazon’s growth continues to be nothing short of phenomenal. Its revenues in the fourth quarter of 2015 shot up 22 percent compared with 2014, bringing the year’s overall sales growth to 20 percent. But more than its sheer earning power, Amazon is dominant when it comes to consumers’ attention and engagement. More than a third of all shopping visits to websites in the fourth quarter were to Amazon, according to measurement firm Hitwise.

Additionally, thanks to its vast collection of product content and reviews, Amazon is often a waystation along the path to purchase. For example, during the 2015 holiday season, 87 percent of consumers reported using Amazon to browse for ideas and comparison shop, even if they ultimately bought elsewhere.

But despite these impressive numbers, there’s plenty of room for merchants to make headway against Amazon. As always, Amazon’s chief strength — its massive size, with all the economies of scale and breadth of selection that entails — can also be its Achilles heel. Whether the product is wine or handbags or batteries, the shopping experience is uniform, whereas merchants focusing on a more narrow set of product categories can tailor their offerings to showcase deep expertise and  foster community connection.

To compete successfully with Amazon in 2016, merchants should:

Use social media to inform and create content. To satisfy the information cravings of those consumers using Amazon for research, merchants should not only develop comprehensive core product content, but they should aim to achieve critical mass for customer reviews by actively courting customer contributions via multiple touch points — from product packaging to post-purchase email communications — and likewise use review content in social media, in email campaigns featuring top-rated items, and in stores.

Tailoring review criteria to include category-specific criteria, such as ease of assembly or whether apparel fits true to size, further distinguishes merchants’ offerings and demonstrates knowledge of what product attributes are important to shoppers.

Kibo merchant Crazy Shirts uses detailed reviews that illuminate the fit and style of apparel items, as well as the type of dresser the reviewer is, so that shoppers can evaluate which reviews are most relevant to them. Review text is incorporated into promotions, including on the home page.

Merchants should also seek opportunities to incorporate further user contributions, with social media serving as both a source of content and a sounding board for which information spurs engagement and eventual purchase. By encouraging participation in content creation, merchants empower customers and followers to help shape the brand’s identity.

Promoting that content beyond social media, and closely tracking the results of related campaigns, ensures that merchants make the most of their efforts to spur user contributions, while informing the future direction of content initiatives. Ultimately, merchants can create and sustain a tightly-knit community around their content, building value that helps sustain an audience of loyal customer advocates.

Amp up the proactive service.
Amazon gets high remarks for responsive service and provides comprehensive self-service information that other merchants should match. But because policies vary according to whether products are sold by Amazon itself or marketplace sellers, consumers must read the fine print to determine how their orders will be handled.

To distinguish themselves from Amazon and their other competitors, sellers should make the most of their sole ownership of customer service. They should highlight FAQs about shipping and delivery, returns, gift card redemption, and loyalty club services in locations other than a “customer service” link in the global footer.

And given that fully two-thirds of shoppers consult return policies prior to purchase, merchants should call attention to perks such as extended windows for returns or free return shipping. Kibo merchant Title Nine promotes its “360 Guarantee” pervasively throughout the eCommerce site, from the home page to the product page to the global cart dropdown display.

Going still further, merchants can take advantage of their deep category knowledge to provide proactive pre-purchase service that supports shoppers in the research and consideration phase. Detailed fit guides that go beyond a size chart, product demonstration videos, and links to user manuals and installation instructions can proactively address key questions. Apps and other category-specific branded tools to help shoppers winnow their selections can further distinguish merchant sites as a go-to helpful resource.

Kibo merchant Design Within Reach pictures furniture dimensions on the product page, and offers a free swatch service so shoppers can touch and try fabrics prior to ordering pieces. Swatches can be ordered directly from the product page, thereby allowing shoppers to continue their browsing uninterrupted. Design Within Reach also provides a custom tool which allows shoppers to enter room dimensions and arrange furniture items to get a further perspective on fit and design.

Promote online/offline connections.
There’s a reason Amazon has opened a retail store, with others possibly on the way: despite the strong growth of online commerce, the vast majority of retail sales still take place in person at physical outlets. The ability to touch and try items and carry purchases home that day, not to mention the social experience of shopping, give stores a unique advantage. Merchants should do their utmost to integrate information about in-store availability, store promotions, and special events into the online shopping experience so that consumers researching online with intent to buy at their local outlet have further incentive to visit.

Once in the store, shoppers are already fashioning a blended online/offline experience for themselves using their smartphones — a third of store shoppers say they use their mobile devices to check prices, and a quarter seek further information online about products on shelves. Merchants should support this behavior by promoting the comprehensive array of content and further inventory available online, from reviews to personalization services. Kibo merchant Cost Plus World Market highlights store items that are popular on Pinterest, and encourages loyalty club members to log on via mobile devices prior to checkout to access their current coupons.

How do you distinguish your brand from Amazon and the rest of the competition?