It was once just an online retailer, now Amazon has developed into one of the largest marketplaces in the world. Its retail business has revolutionised ecommerce.
The company demands respect and earns it. With Target’s CEO Brian Cornell (almost) thanking them as an inspiration for improving their online presence, it’s safe to say Amazon’s size and development has influenced others to think differently.
Obviously few retailers possess the vast resources that Amazon has, so its lessons are impossible to perfectly mimic. However its practices can help retailers get the ball rolling on various aspects of their business.
Here are the top three lessons any retailer can learn from Amazon.
1) The customer comes first
Amazon makes it a point to provide their shoppers with the most wonderful customer experience possible.
With a 24-hour phone number and an easy-to-find help link on each page, Amazon wants to make sure its customers are never frustrated or confused.
Whenever Amazon CEO Jeff Bezos gets an angry or concerned email from a shopper, he immediately forwards it to the appropriate person within the company with a simple “?” illustrating his concern for consumer happiness.
Employees move fast to fix any problem, but Amazon’s care for customers goes beyond its customer service.
If you’ve shopped on Amazon before, you’ve probably noticed Amazon’s ability to offer product recommendations based on past searches. It is attempting to make the shopping experience simple and seamless for all and especially those who have shopped with Amazon before.
It also offers product bundles at the bottom of product pages to help a shopper realise a previously unknown need.
2) Incentives work
The easiest way for consumers to get the most out of their Amazon experience is to sign up for a Prime membership.
In the United States, the $99/yr program offers free two-day shipping on eligible items, among other things like video and music streaming services, photo storage, and early access to Amazon’s latest inventions.
$99/yr seems a little steep, right? Well it isn’t too steep, since 45% of Amazon’s customers in the United States have signed up for Prime, putting membership at almost 40m people.
This loyalty has given 40m customers an extra incentive to shop with Amazon. Loyalty programs are powerful, especially when offered by trustworthy brands.
3) Your brand can shape price perception
With continuous reports of Amazon losing profit and third party sellers reporting being undercut by the giant, Amazon has earned the title of being a loss leader. If consumers want a low price, they look to Amazon. They are known for daily deals and undercutting competitors frequently.
However, recent data shows that Amazon does not always have the lowest prices available for its items.
While Amazon does lower the price on high-investment purchases (like TVs), it actually increases the prices on complementary goods (like HD cables). Therefore, it does not always live up to the low-price reputation it has gained over the past few years.
Key take aways
Amazon’s practices provide retailers of all sizes with useful lessons. Yes, customer service is important, but smaller retailers may not be able to afford a 24-hour call centre to accept calls. However, live chat during business hours can suffice.
Gathering customer data on your site can also offer personalised recommendations and product bundles to provide an optimal experience.
If you’re looking to start up a loyalty program, don’t introduce it at $99/yr. Start small, with free shipping on purchases that meet a minimum order threshold. Begin offering free shipping to returning customers, as well. This can help you build your brand value.
Your brand can improve your pricing flexibility. If your loyalty programs and customer service gain popularity, you can use them to justify higher prices.
All in all, Amazon is a great company for retailers to look up to. Its retail practices can teach resellers how to get ahead of their competition, which can include Amazon itself.
It can be hard to beat Amazon at its own game, but putting a new spin on their practices can help retailers differentiate themselves from the giant. That spin is up to the retailer’s discretion, but if it’s innovative and refreshing, they can establish themselves as a worthy competitor.