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Michael Schirrmacher: ‘Beating Amazon at their own game’

By Sasha Fedorenko June 27, 2019 - 10:09 am

Amazon’s market domination is an increasing concern for both retailers and brands. From their heritage as a bookseller, through to web hosting and their latest multimillion investment in Deliveroo, the ecommerce giant are making their mark in every sector. Almost 90% of UK shoppers use Amazon for online purchases, and two-fifths have access to their Prime subscription service.

The company’s stroke of genius that got them to this point was introducing consumers to unseen levels of simplicity and speed. This has set the bar high for retailers, with many consumers now taking that experience for granted. While these numbers might leave many brands and retailers in fear of Amazon’s assault on the high street, the reality is that they can outperform Amazon in many areas and beat the giant at their own game.

The company’s latest earnings are a clear sign that while their cloud business performs well, Amazon’s ecommerce domination is slowing down. One reason, arguably, is that it’s falling behind when it comes to delivering the contextual shopping experiences that today’s customers crave. Offering customers speed and convenience is great, but those elements alone are no longer enough.

Quality over quantity

Recent research by Wunderman Commerce found that in many cases, consumers prefer other vendors over Amazon. This is partial, because they find cheaper pricing elsewhere (61%), but also because other vendors are offering more attractive loyalty programs (26%), more specialised product ranges (18%) or only because they are looking for more tailored or in-store experiences (46%).

Yes, Amazon’s almost infinite product catalogue is a huge competitive advantage. However, it is much like having an old-fashioned phone book – it probably has the number you need, but it will take you ages flipping through the pages to find it. The reality is that when it comes to buying significant, ‘special’ items or gifts, consumers will often look elsewhere.

People want a straight-forward route to check-out, but they also want to feel understood and given a choice that is relevant to their wants – in essence, people have very little tolerance for subpar digital experiences. Those who fail to deliver on relevancy put customer loyalty at risk. This is where brands and retailers can perform better and leverage modern technologies to help them deliver an experience that really delights their customers.

Relevance over odds

All too often, customers can search for one thing in a retailers’ online store and be offered a completely irrelevant item. These rather random recommendations can quickly cause frustration and even push a customer to search, and purchase, what they need elsewhere. Implementing smarter, self-learning functionality can help brands and retailers offer relevant search results, giving customers exactly what they each time.

Relying on a visitor to an online store to log-in is one way to offer a personalised experience, but an old school approach. Now, businesses can use browsing behaviour, overall consumer trends and real-time visitor data to personalise assortments in the moment of browsing. This means algorithms can adapt content to different browsing behaviour in real time, giving customers no reason to look elsewhere.

These chinks in Amazon’s armour are exactly where retailers and brands can up their online efforts and take it on at their own game. It is about improving every step of the shopping journey, from personalised content and recommendations, through to delivering on search results to offer experiences that count. Those who think they need to replicate Amazon to compete with it must really think twice as in reality there are many areas where they can perform better.

Author: Michael Schirrmacher, managing director, UK Bloomreach

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